We all would like a bit more money in our savings account, right? Money to pay off our mortgage more quickly. To get out of debt. To take a vacation. To pay for the kids’ college. To be able to retire without living solely on rice and beans for ten years.
What’s the secret to saving more money?
Simple: Have a specific goal in mind.
I know, it’s too easy, right? But trust me, goal-setting is powerful. Right now, is the money in your savings account designated for a particular expense? Why not?
We have found that earmarking money for something specific helps motivate us to save more. Let me give you an example.
Each summer our family’s income drops dramatically. My husband is a graduate student, and his funding stops during the summer months. While I am still earning money from my teaching job, it is simply not enough to pay all of our bills and living expenses.
In the past, we have used credit cards to help us through the summer. This year, however, we had committed to paying off our debt, and we refused to add any more to our credit card bill.
Back last October, we sat down together and examined our finances. We decided that we would need $700 for each summer month (June, July, and August) to be able to pay all bills and live comfortably. That is $2100! That number seemed almost unreachable, but we committed to trying.
Imagine our excitement when we had saved that much by the end of March!
Here’s how we did it:
Saved all “Bonus” Money
We decided to view any “bonus” money as money earmarked for our summer fund. This included: – -$500 check I receive each December from my employer for having an advanced degree
-$200 gift at Christmas from family
-$500 from our tax refund
It was tempting to view this money as fun spending money. However, since we were committed to our financial goal, we immediately put it in our summer account.
Picked Up Extra Work
I am a full-time teacher, and my school asks for staff to tutor in the afterschool program. This program pays $25 an hour, so I decided to work two hours a week. From this relatively small time commitment, I earned $700! There were many days when I was exhausted by the end of the school day, but I knew our goal of a debt-free summer was worth the effort.
Saved Money Left Over from our Budget
Our family has a written weekly budget that we keep a close eye on. We have decided how much we will spend each week on groceries, household items, gas, fun, etc. We actually have a chart on our refrigerator where we record everything that we spend in those categories each day. Therefore, it is easy to know if we are over or under our budget at the end of the week.
My husband and I decided to take any money left over from our budget and transfer it to our summer fund. For example, we budget $70 per week on groceries for our family of five. If I spent $65 one week, we moved $5 into our summer account. To help save even more money on our groceries, I did as much research as I could–learning a ton from Crystal Paine’s Grocery University Course–to drastically reduce our grocery bill.
I wasn’t sure if it was worth it to save a few dollars here and there, but I decided to give it a try. I’m glad I listened to my husband, because we saved over $200 this way!
It was an amazing feeling when we realized that we had reached our goal. It made us realize that by simply focusing on one specific goal, we could save more money than we could have imagined!
What could this mean for you? What would you like to save for in the short-term? Pick a concrete item: a new washing machine, your Christmas budget, an anniversary getaway weekend, paying off a credit card balance. Then, focus your efforts on throwing any money you can toward that goal. Every little bit helps! Tuck the money away into an envelope, a savings account, or somewhere else that you can access it easily. Finally, celebrate when you reach your goal. You did it!
Use the momentum from this victory to propel you to an even bigger goal: paying cash for a car, paying for your family vacation, paying off your student debt. By designating that money toward your savings goal, you’ll find yourself saving more than you thought possible!
Have you ever saved up for a specific goal? What was it? How did you do it? I’d love to hear about it!
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