Give up Starbucks. Stop eating out. Ditch cable. Get a cheaper phone plan. There are a million ways to save money that work. However, in our quest to add to our bottom line we sometimes forget some basic truths about money. Below are 8 that I return to time and again. They serve as a wake-up call, motivator to get my act together, inspiration for new ideas, and a reminder about what's important in life.
1. You're Either Saving Money, Treading Water, or in Debt
If we're not paying our bills in full and we're not saving money, we're going (deeper) into debt. We can straddle or bounce between categories, like paying our bills but not saving anything, or paying down a mortgage while also putting money away. "But wait," you say." A home mortgage is 'good' debt." Perhaps, but it's still debt, and until it's paid the amount you can save is limited. This is not a judgment, just something I keep in mind to remain cognizant of, and intentional about my finances.
2. Having the Right Mindset Is Key
Successful saving is as much about mindset as it is specific activities. If where you are right now is as good as it gets, could you be happy? When feeling anxious about money, fretting over not seeing movement, or sad because I can't have something, I take a deep breath and ask myself that question. My begrudging answer is always, "Yes." That simple exercise moves me from feeling deprived to abundant.
Feeling abundant means there's room for more - happiness, growth, love, money, whatever. Conversely, when you feel deprived your instinct is to withdraw, withhold, and hoard. When you close yourself off there's no room to pursue the very activities that can lead to more. Find ways to feel abundant and open those money saving gates.
3. Saving is a Habit
It's easier to save when money is flowing or there are short-term goals like buying a TV or refrigerator. But when money is tight, or you're saving for something like retirement, it can feel like an endless cycle of denial. That's when having a savings habit helps. Since habits eventually become automatic and second nature, you'll be better able to get back on track after the inevitable, irresistibly alluring, savings-busting detour presents itself.
4. Know and Own Your Savings Style
What kind of saver are you? Are you an "easy come, easy go" type who spends all money unless a portion is intentionally removed and placed somewhere else? I'm the opposite, a "pay myself first" saver who loves watching it grow and loathes unanticipated withdrawals. There's nothing wrong with either or other styles, as long as you are saving.
It's important to know, understand, and be aware of your style's advantages and shortcoming. For instance, the "easy come, easy go" saver may be more prone to splurges while the "pay myself first" style could have a hoarder quality if gone too far. Awareness is the first step in figuring out your best ways to save. P.S. Any style where you're saving is better than one where you're not.
5. Knowing is not Saving
Do you really need that thing you're thinking about buying? It's a great question, especially when saving is paramount. I ask myself this a lot. It's harder to answer than it seems because the truth is uncomfortable and often doesn't make a difference. The reality is there are only a few essentials needed to live comfortably, so, "No. I don't need it now." So what? Does knowing stop us from buying, especially when it's inexpensive? Getting real about saving money means taking action, not just acknowledging the truth. After all, knowing is not saving. Saving is saving.
6. Nothing is Permanent
Change is wonderful when it's for the better and horrible when it's not. You've got a good savings system going but then things shift. Taxes increase, utilities rise, your job reduces its 401k contribution. Nothing is permanent. For me, it was a new career. There'll always be something, so learn to go with the flow, find other great ways to save, and take the next truth to heart.
7. Change it Up
Albert Einstein once said, "The definition of insanity is doing something over and over and expecting a different result." If your savings plan isn't working, or isn't enough, are you willing to try something different? Sometimes we're comfortable or stuck due to familiarity. Sometimes it's fear of the unknown or failure. Whatever the reason, the truth is a different result will come only after change is made. Get a new job, or side hustle. Rework your budget. Take in a roommate. There are thousands of things to try. Speaking from experience, busting out of a comfort zone is hard, but ultimately rewarding. You can do it. Really, you can.
8. Money is Simply a Means to an End
What are you saving for? If you're like me there are multiple short and long-term reasons. In fact, unless I hit the lottery I'm sure I'll be saving for something for the rest of my life. But ultimately I'm saving money so I can spend it. It's just a means to an end.
Money will always flow in and out. At its core saving is nothing more than spending less than we bring in over a period of time. It's a stressor because we give it too much power. It controls us instead of the other way around. Yes, having and saving money is important. But years from now I don't want to look back and realize that I've spent ungodly amounts of time consumed and stressed out about saving money. I don't want to miss out on experiences best had now just to meet a retirement goal a little faster. It's definitely a balance, sometimes a battle, but it's just money. Save it, yes. Have a good life, definitely.
Kim Owens is a psychologist, former college VP, and awesome deal getter currently obsessed with zoodles and launching her new blog MoneyUndertheCushions.
She invites you to get your complimentary copy of the "Goof Proof Guide to Slashing Your Cable Bill (and More) and Saving Hundreds or More a Year!" You'll also receive updates, tips, and inspiration on ways to, "Make More, Save More, and Be Happy." Come on over and join the Money Under the Cushions gang!