We’ve just passed the first quarter of the year and it’s also this time of the year that you may begin to see some of your New Year’s resolutions start to lose momentum. More specifically we’ll look at your savings goal and tips on how to ensure you maintain the momentum and consistently save throughout the year. Often the beginning of the year is when you look to commence a New Year’s resolution. One common New Year’s resolution is to come up with a savings goal. The issue however is that the momentum starts to slow down after a couple of months into the year. Here are some tips, which may assist you in ensuring you maintain the momentum and consistently save each month.
Use technology as it’s readily available now
One of the most common factors that prevent consistent savings is the tedious process of having to keep track of all the income and expenses from day to day. Having to remember what that $50 you withdrew the other week was for, or remembering to retain all the receipts from last month, so you can register the amounts can become very tiresome, very quickly. Luckily we now have technology to assist us in keeping track of all your income and expenses and programs which are able to link all your bank accounts and credits cards. This means after the initial set up of the accounts, all you have to do is spend between 5 – 10 minutes each week checking your income and expenses online. You can even download an app to your phone, so you could categorise your expense and review your cash flow anywhere. Having a simple method of tracking your income and expenses will assist you in consistently reaching your savings goals.
Simplify expenses and income details
Another common mistake we see is having too many categories in your budget. In your expenses section you may have a category for fruit and veg, then another category for groceries and perhaps even another category for meat. Ultimately you could just bundle all these expenses together into groceries and reduce the amount of categories under expenses. Furthermore, consistently recording certain expenses the same each month / week is also crucial. This means do not record the costs of your fruit and veg as groceries one week and then the next week record it as shopping. The same applies to your income. If you have income derived from several jobs, you could simply categorize all the income as salary, instead of recording each income individually. Having fewer categories will make it easier for you to analyse and compare your income and expenses from time to time.
Turn your savings goal into your lifestyle
One of the most important reasons why you should stick to your savings goal is that once you’ve consistently saved for a period of time, you will automatically change your daily spending habits. When you initially start to review your expenditure, it will feel very daunting and painful knowing you can’t buy that new phone that’s been released as it means you won’t reach your savings goal for the month. However over time you’ll find it becomes easier and easier to manage all your spending. This means that eventually you won’t even think of the savings plan as a painful task but rather something you just do naturally. The trick is to stay consistent each month.
Never lose sight of your original goal (Have a Cash Coach on your side)
Whether it’s to purchase a new car, your first home, or save for the next family holiday, we generally start a savings plan with a specific goal in mind. The issue arises when motivation starts to lack and our vision of the original goal starts to blur. There is also the issue of temptation, knowing that there’s now a certain amount saved up, it’s very tempting to make impulse purchases on things we don’t need. The important tip to remember is to never lose sight of your original goal and keep yourself disciplined and accountable in order to reach that goal. This may mean you get your partner, family member or friend to keep you accountable. Even better is to have a financial adviser in your corner. Similar to having a personal trainer at the gym, having a financial adviser on your side means you receive that additional support in order to achieve your savings goals.
Here at JBS we have a Cash Coach program, which assist clients in tracking their income and spending every day. More importantly JBS acts as a coach and will evaluate your performance each month, to ensure you’re still on track to meet your goal. If you’re thinking about starting a savings plan or just need someone in your corner to help you save, JBS can assist.
– Andy Lay –