How do you save money in 2022? Read on for my 5 key tips.
Happy New Year to my readers! I hope you had a great holiday and feel recharged and motivated – I certainly do. Let’s get ready to make 2022 a great year for our finances. With than in mind, here’s how to save money, my top 5 tips!
1. How to save money – start by writing down your money goals
By writing down your goals, you will be 10 times more successful than those without goals.
Writing down your goals is a simple yet effective way to achieve them. Try to get specific about saving money:
- What are you trying to save for?
- What is the exact amount?
- When do you want to save this by?
- How much do you need to save per month?
Break it down.
Let’s take one of my own goals for example. I’d like to save some money to travel. To turn this into a goal, it would something like:
I would like to save $6,000 by October 2021 for a trip to Asia. This means I need to save $600 a month for 10 months.
Why is goal setting so important?
I always emphasise the importance of writing down goals and here’s why. According to a Harvard Business Study:
- 83% of the population does not have goals
- 14% have a plan in mind, but are unwritten goals
- 3% have goals written down
- The 17% who have goals are 10 times more successful than those without!
Taking five minutes out of your day to write down some goals can make a bigger impact on your finances than you think.
2. Have a budget (of some kind!)
Without watching what you eat, it’s challenging to lose weight. In the same way, it’s difficult to save money without a budget. Yes, it can be done – but it is tough!
The reason for this is that budgets give us a clear picture of our financial situation. How much are we making? How much are we spending? How much are we saving? Keeping track of your money allows you to answer many of these questions. When you know where your money is going, you are in control. It is only then we can start making meaningful changes to our finances.
An easy way to get started is with a budget planner. Money smart has an excellent free budget planner that takes around 20 minutes to complete, check it out:
3. Have the right mindset
It can be very tempting to blow our budgets.
I often succumb to shopping – beauty and fashion sales always have me spending more than I would have liked. A strategy that has kept me from overspending is comparing it to my savings goal. I usually ask myself:
“I can spend $50 on this item, or I can put $50 towards my Asia trip – what would I prefer? What would make me happier?”
I find framing it like that to be more beneficial. You aren’t “depriving” yourself of buying something, rather choosing to prioritise your savings goal. Don’t be afraid to remind yourself of that goal consistently to ensure you stay within your budget.
4. Combine your subscriptions
We all know to cancel unused memberships to save money.
However, one new strategy you may have not used yet is combining memberships. For example if you have a Netflix and Stan membership, only pay for one and find a family/friend who will pay for the other. Then exchange logins and you have access to both services for one price.
I have organised this set up recently with a few friends and it has worked really well. I pay for a unique subscription that not many people have so I can use it as a bargaining tool to access other services for free. To make this a truly impactful tip, transfer the money you would have spent on an membership to your savings account, instead.
5. Treat your savings like a bill
If you prefer a hands-off approach, this is the perfect tip for you.
Think of your savings goal like a bill such as rent or electricity. After writing down your goals, you’ll know exactly how much money you will need to put aside. You can then set up an automatic transfer every time you get paid. For example, I get paid monthly so I would set up an automatic transfer of $600 every month on pay day.
Not only does this tip make things easy, it also ensures the savings goal is prioritised. I love the quote “Don’t save after spending, but spend after saving”.
With these 5 tips, you’ll be on track to achieve your savings goals in 2022. I’d love to know what you are trying to save for this year, send me a message on insta @themoneymarketerblog or feel free to contact me here.