Many people want to save more money and be financially stable, however lots of people struggle. Many people think the only way to save money is to make more money and that’s not true. Sure it would be great to make more money but making more money doesn’t guarantee that you will save money or be financially stable. Garrett Meccariello, a behavioral scientist, once said that "If given the opportunity to spend a thousand dollars now or wait until it grows larger in the future, most people will choose to spend that money now." The fact of the matter is that in-order to improve your financial situation you need to re-evaluate your mindset about money. Below are 5 ways to improve your money mindset.
- Take responsibility for your spending habits. Know that saving money isn't just about your income. If you have enough money to cover your necessary expenses with money left over, then what you choose to do with your extra money is your responsibility. If you waste your extra money on frivolous items then it's your own fault. You can also choose to use your extra money in more productive ways like putting it in a savings account, investing it or using it to make extra payments toward bills.
- Determine why you are saving. Write down your savings goals. Are you saving so you can get out of debt, to retire early, to buy a new house, or maybe you're saving to help pay for college for your children. After you determine why you're saving, make sure your savings goals are visible. Put reminders and notes all over your house and make a screensaver on your laptop or desktop with your savings goals. Do whatever it takes to remind you of why you're saving and to keep you motivated.
- Automate your savings. Develop a habit of saving every month by putting money in your savings account automatically. Allocate a set percentage of your salary (5%, 10%, 15%) or a set amount of money to your savings account the day you get paid. By doing this you're saving first and spending second so you don't run out of money before you save.
- Create a spending goal. Goals should be set for spending money just like for saving money. Look at what activities you can give up and what activities you can cut back on without impacting your happiness. Look at your monthly bank statements and put your purchases into categories. Look at your purchases in terms of either "great purchase" or "why in the world did I buy that". When you categorize your spending, you can learn from past regret purchases and you can limit your spending.
- Get savings inspiration. Use background images on your phone, follow money saving social media pages, and research other websites and feeds to inspire you to save money. What you see can alter your behavior.