Transitioning From Spender To Saver - You Can Do It!

Saving money is downright BORING. Where’s the glitz and glamor in transferring an automatic, $25 deposit each week into a high-yield savings account? I bet nothing gets your adrenaline pumping more than dumping a pocket full of change into an old coffee container every night, right?

Sure you may be rolling your eyes now,  but if you’re actually serious about curtailing your spendthrift tendencies, you’ll find a new appreciation for the small stuff…not to mention more money in your pockets and bank account.

What’s Your Motivation?

Maybe you’re saddled with thousands of dollars in high-interest credit card debt or perhaps you’re just fed up with those ever-nagging loans (cars, clothes, personal and what-not). Whatever the reason, if you don’t already know, I encourage you to find the motivating factor(s) behind your desire for change. Spend some time with a pen and a pad of paper and write down five reasons why you want to stop spending and start saving. Afterward, under each item, write one sentence explaining why it’s important to you. Trust me - writing this stuff down works! If you think you’ll just do it in your head as soon as you have time, you’ll never get around to it. The key here is to identify how and why your priorities have changed and what you can do to stay focused on your new goals.

Following Through

Take that list you created and make a few copies of it. Stick  copies around the bedroom, bathroom… Fold another and put it in your wallet, preferably next to your cash. In order to follow through effectively, you’re going to need to constantly remind yourself of your new financial goals so you can keep unnecessary spending in check.

Whenever you feel the urge to make a purchase, ask yourself these questions to determine whether or not it’s worthwhile:

• Is this purchase something I need or something I want?
• How will this purchase impact my financial goals?
• Will I regret this purchase next week or next month?
• Is it possible to make this purchase elsewhere for less money?

Let’s Get Real

Granted, carrying around a piece of paper with your financial goals scribbled on it isn’t going to transform you into a wealth-building machine overnight. You’re going to have weak moments and probably succumb to temptation more than once which is completely normal. However, you need to realize that your spending habits are just like any other habit - they’re going to take considerable effort on your part to change for the better.

Tips To Save By

• Make a budget. Spend some time developing a written budget so you can see exactly how you’re spending your money and how much you have left over to save.
• Cut back on frivolous spending. Do you really need to drop $250 on an ensemble? I have dropped close to that on a shirt, kicks…but right now?Maybe not.  Wouldn’t your time be better spent reading up on IRAs and 401Ks, really educating yourself about investments?
• Avoid the temptation. Not long ago, I’d find any excuse I could conjure up to head to that store I have been window shopping for awhile. I just had to get a new pair of socks or two or something else!! you get the idea. If you tend to reach for your wallet when you’re bored, try doing something productive instead, such as vigorous exercise.
• Embrace regular savings. My favorite tip of all! Open up a high-yield savings account with HSBC or ING Direct and set up a weekly contribution that you can afford. If you transfer just $25 each week, you’ll have accumulated over $1,300 in only one year.

Again, it’s not going to be easy to break the spending habits you’ve grown accustomed to, but like anything else in life, you get out of it what you put in it.

Image courtesy of: dmuth

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