Take these steps now to get your mind in the right place to build more savings in 2022.
A mindset is a “mental attitude or inclination,” according to Merriam-Webster. You may already apply mindset techniques when it comes to maintaining fitness, keeping a positive attitude, excelling at work and other aspects of your life. But did you know that having a “saving mindset” can also help you build savings faster?
When you’re focused on a goal and take steps to create a saving mindset, you’ve got a better chance of building savings than if you simply set a savings goal without bringing along a new way of thinking. That’s because having the right mindset doesn’t just affect saving. A saving mindset also makes you more aware of spending and financial milestones you’d like to achieve.
If you’d like to build emergency savings or save for a large purchase in 2022, here are seven ways to bring a positive mindset to your financial goals.
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1. Set savings goals
Few things work better for creating a saving mindset than setting achievable savings goals. For example, maybe you want to save $1,000 as a starter emergency fund. You might want to save for a new car, down payment on a house or retirement. Once you set your savings goals, the rewards for saving can inspire you to keep at it as you achieve each goal one by one.
2. Create a monthly budget
If you don’t have a monthly budget, you’re probably forgetting about certain recurring expenses that could cut into your savings contributions plan. It’s easy to create a monthly budget using budgeting apps like Mint and You Need a Budget (YNAB).
That way, you can budget exactly how much you’d like to allocate to savings each month. Many budgeting apps also track spending, which can help you see where some of the money you spend on an everyday basis could go to savings instead.
Find out: How to Create a Budget and Stick to It
3. Make a savings pact with a friend
When you’re accountable to another person, you’re more likely to have a saving mindset. Ask a friend or coworker to be your savings buddy and then check in with each other every month to report your progress. Before long, you’ll each have at least a moderately padded emergency savings. Then you can build from there, offering encouragement to each other along the way.
4. Set up savings contributions through your employer
Nothing says “saving mindset” like committing to deposit money into savings with every paycheck. Ask your employer to deduct a set amount from each check and deposit it into one or more savings accounts. Not only will savings add up fast, this is also a fairly painless way to build savings, since you don’t have to transfer the money yourself.
Find out: 6 Painless Ways to Build Savings in 2022
5. Meet with a credit counselor
Another way to build a saving mindset is to meet with a credit counselor at a nonprofit credit counseling agency. Most nonprofit agencies don’t charge a fee or charge only a small fee, so it’s not like you’re spending money that could otherwise go into savings. Instead, you’ll get advice on ways to save, help with creating a budget and coming up with a debt payoff plan so you’ll eventually have more discretionary income that you can put towards savings.
6. Reward yourself with each savings milestone
When you set savings goals, write down a reward that you’ll give yourself when you hit each savings target. For example, when you hit $200, you could reward yourself with something small like a new item of clothing that you buy on sale. When you hit $500, your reward might be larger, like getting a massage or purchasing a new pair of shoes.
Don’t use money from your savings account for your reward, though. Instead, set aside cash in each monthly budget so that when you hit your savings goal, you’ll have enough to reward yourself right away.
Published by Debt.com, LLC