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I’ve been thinking about the term “saving” lately. When I hear the words saving, save, savings, etc. they’re usually used in one of two ways:
“I just saved $50 on my groceries this week!” or “John has already saved $15,000 for his retirement.”
One use of the term is more like an action, while the other is more like a place.
What I want you to make sure, is that every time you are saving money (action) you are putting it into savings (place.)
Save That Money (What Are You Doing With It?)
It is definitely awesome to save some money on purchases. It’s why I use coupons anytime I can, or get excited in the checkout line at the grocery store when I’ve stayed under budget.
But I’d like to challenge you a bit: what are you doing with those savings?
For example, we’ll look at groceries again. Say you expected to spend $125 at the grocery store, but you only spent $75. That’s awesome, congrats! Now what are you going to do with the money you ended up not spending?
Is it just going to sit in your checking account? If it stays in the checking account, you know as well as I do that it will eventually just “disappear.”
Do You Have a Designated Savings Account?
What I’d like you to do from now on is this: each time you save money that you were expected to spend anyway, transfer the money into your savings account.
If you don’t have a savings account, that is your first action step. Go to the bank, or even open one up online. Make sure you have an account that is designated just for savings.
This might seem like it’ll be a huge inconvenience to be moving money around all the time. But with the tools banks are giving you nowadays, making transfers is easier than ever.
At my bank, I can open up the online banking app and instantly make a transfer. It probably takes about 30 seconds to go from logging on, to money saved.
Try It For A Month
You know I’m all about habits here. The goal is to make actually saving money a habit. It may take a little getting used to at first, but eventually you’ll do it without even thinking.
Make it a fun experiment for a month. Every time you realize you’ve saved money, move it over into your savings account. At the end of the month, see just how quickly your balance has grown.
PS: You can also do this with paying off debt. If you’ve got your small emergency fund funded already, use the money you save to make extra payments on your debt. It may be more practical to make one payment a week, or save it up throughout the month and make one big payment at the end.
Any way you do it, put your smart savings efforts to good use! Don’t just stop at getting a great deal.
Make sure your savings account gets a raise. Don’t let all that extra money you work hard to save “disappear” in your checking account. By making sure you actually save the money that you’re saving, you can hit your goals faster, and watch your savings account grow at a much faster rate!