How to start saving money
Saving money is addictive. Once you start, you become obsessed. Here’s how to start saving money and build positive habits.
Dr Gina Cleo is a “habit scientist” and the director of the Habit Change Institute. Dr Cleo spoke to us about how to make saving money a positive habit in your life.
According to Dr Cleo, there is a lot of misinformation about habits. While it’s commonly believed it takes 28 days to form a habit, Dr Cleo tells us it can take up to 254 days to cement it in your mind.
“I wanted to offer people accurate and science-based information for changing habits and achieving long-term success. The Habit Change Institute offers comprehensive habit change courses for coaches, teachers, managers and health professionals,” Dr Cleo tells us.
Be aware before we get started, it’s to be noted that the information on this website is for general information only. It should not be taken as constituting professional advice from the website owner. We at Redaktor are not financial advisors.
So, how do we start making saving a good habit?
Create default systems so you’re not depending on your memory or willpower.
For example, set up an automatic transfer that scoops money into a savings account every time you get paid.
If you have a purpose or goal for your savings, you’ll be more motivated to want to save; this can be a short-term goal like going on a holiday, or a long-term goal like buying a new house.
Why in your opinion are people typically not great at saving?
I think people are either great at saving, or they’re not. I often notice in relationships, there’s a spender and a saver. Your financial habits are malleable; if you want to get better at saving, you can!
Do you need to have a large income to be good at saving?
It’s important to ditch the ‘all or nothing’ mentality and focus on consistency. If your income covers your expenses with a bit extra, then you can have a healthy savings account.
Using tools such as the Bill Sense feature in the CommBank app is really handy as it predicts future bills to help customers, especially those new to budgeting, stay on top of their finances.
Every little bit counts.
What are some daily habits our readers can implement to improve their financial wellbeing?
According to a recent survey by CommBank, seventy percent of millennials say that being on top of their finances makes them feel most accomplished, this includes paying bills on time and knowing how much money is in their bank account.
Relying on your memory can let you down and bills can be missed. Keeping a diary or using Bill Sense in CommBank’s app is really handy as it helps you to better manage and keep track of your finances. Bill Sense shows you how much you will need to cover your bills for up to 12 months in advance, so you’re not hit with hefty surprises!
Create a habit of checking your bank balance at least twice a week. Habits are formed best when you do them at the same time of day (e.g., 7pm). To help you get started, use a recurring alarm as a reminder check your balance.
With time and consistency, checking your bank balance will become an automatic habit.
Do you know what you’re splurging on? Sometimes, our spending habits get in the way of our well-intended financial goals, and we’re not always aware where our money is going!
At the end of each month, look at your spending over the previous 30 days and highlight all the ‘non-essential’ spending you’ve done – you know the ones – the café-bought smashed avo, the new outfit, the gold-class movie tickets; anything you don’t need.
Becoming more aware of your spending habits helps you make less impulsive purchases and can increase your financial wellbeing by giving you more control.
There’s no questioning that having savings is great, but new clothes and meals out are great too!
To strike a saving-spending balance, put away realistic amounts of money each week.
Trying to save too much and not enjoying life could result in you falling off the wagon and abandoning your financial goals altogether.
Start small, there’s no need to cut out all of life’s pleasures.
Saving money isn’t impossible, and neither is getting out of credit card debt. Here’s how to get started.
Photo by Daniel Öberg on Unsplash
Luke Hopewell is the editor and co-founder of Redaktör. He's previously been the Editor of Gizmodo, Founding Editor of Business Insider Australia, Editorial Lead for Twitter Australia and more.