You get a raise or start making money from your side hustle and you’re on top of the world. You feel like you’ll finally be able to make some progress on your financial goals. Then the end of the month rolls around and the amount you thought you’d be able to save isn’t there. Turns out you’ve nickeled and dimed all of that extra money away.
Does that sound familiar?
If so, you just fell victim to lifestyle inflation. Don’t beat yourself up too hard, it happens to the best of us.
Instead of making this a habit try one of these strategies to save more of your hard earned money.
Make Money Inaccessible
If you’re like most people it’s easy to transfer your money into savings and it’s just as easy to transfer it right back into your checking account. Prevent yourself from doing this by making your money inaccessible.
You have a couple of options to do this:
Use an Online Savings Account Separate From Your Checking: If you use an online savings account and a local bank for checking you’re not going to be able to immediately access your money. It normally takes anywhere from 2-4 days to transfer your money from accounts, meaning you won’t be able to impulsively spend your money.
Put Your Extra Money In an Investment Account – Your second option is to put all of your money into an investment account. Particularly, a retirement account where you’ll be penalized for withdrawing money early. Assuming you don’t want to get hit with the penalty you won’t touch your money. It’s as easy as that.
Take Advantage of Direct Deposits
If part of your problem is that you can’t seem to hang on to your money long enough to save it then utilizing direct deposit can work wonders for you.
Have your employer deposit a certain amount of your money into a special savings account every paycheck. This way you won’t even have to see the money. At the end of the month log in to your savings account and tell that money where to go.
If you’re working on paying off debt, transfer that amount to checking and immediately make a payment. If you’re building up your investments let your money accumulate a bit and then transfer it to your chosen investment accounts at a specified time period. If you’re working on a different savings goal, like saving for a down payment, then just let the money sit there. Keep it out of sight.
Put All Raises in Your Retirement Account
For those of you working on a retirement related goal and who aren’t currently maxing out retirement accounts, this strategy is for you.
Every single time you get a raise up your retirement contributions by the same amount until you reach the point where you’re maxing out your accounts. You’re not going to miss that money because you weren’t used to living on it in the first place.
Save More of Your Money
It’s easy to get caught up in trying to pinch pennies without actually saving your dollars. If you want to save more of your hard earned money then you need discipline. If you don’t have discipline then you need to trick yourself into saving, which is what these strategies are meant to do.
Do you have any strategies to trick yourself into saving money?