This is a proven strategy that allows me to save 50% of my income. This is not a get rich quick scam.
Here are my top 3 tips to save more money more frequently.
The 1 thing I did to save 50% of my income is not easy but it’s simple: save money before you get the chance to use it.
Out of sight, out of mind is the key to a strong saving strategy.
Subscribe to an investment plan
Every month, 10% of my income goes into investing and buying stocks.
I don’t see this money, it doesn’t even make its way to my bank account.
It feels like it doesn’t exist and then I end up with an investment portfolio as a result (AKA savings).
Pay yourself first
Once my salary reaches my bank account, I transfer a good portion of it to my savings account.
Again, even though I receive this money on my bank account, I send it so quickly to another one that it almost doesn’t feel like I got it in the first place.
Making saving a priority every month adds up quickly.
You’ll be amazed how much of a difference this will make.
The truth is: you don’t spend money in the same way wether you have $2000 in your bank account or $100.
If you have a couple grands in your bank account, you won’t feel guilty about spending $20 on takeouts. However, that seems like a bigger deal if you’ve only got $100 left for the rest of the month.
Of course I don’t transfer a random amount to my saving account. Check tip number 3 to know how much you can transfer, as you don’t want to be sending money to your savings account and then have to go back to pay your bills.
Create a budget
Don’t be scared, we don’t do anything fancy over here.
It’s only a matter of knowing where your money goes.
Look at your previous spendings and have a number next to each spending category. Check out my post about being financially responsible for more guidance on tracking your spendings.
If a spending allocation seems too high to align with your values and budget, decrease the amount and try to cut back on spending money on it.
For example, if you’re spending $400 every month on clothes and shoes, make a conscious effort to decrease your spending in that category. Stop buying without thinking of it first. Then see if overtime you managed to reduce that to $300 or $200 a month.
Have SMART goals and crush them!
Alternatively, you can also do a month without spending money on clothes or shoes at all and see how it felt.
Maybe you can do altogether with a little break from it. This is applicable to many different spending category, try it out.
Sometimes our spending habits don’t necessarily align with our values.
Just take a step back and ask yourself why you’re spending the money you’re spending on certain things. Is that supporting who you are and who you want to be?
You should address the cause rather than the consequence.
I use my budget as a guide to know how much money I can transfer on any given month and I also add whatever is left at the end of that month.
For example, let’s say I calculated I can transfer $500 at the beginning of each month to my savings account. And then at the end of the month I’m left with $200 I didn’t spend. I will add those $200 to my next savings transfer, bringing it to $700.
This strategy will make the biggest difference for your savings game and it allows me to save 50% of my income every month.
To save even more, you can work on your budget allocations overtime to unlock more money to transfer to your savings account.
It’s not easy but you are more than capable to reach your money goals, just start.
