Does it ever feel like you have to force yourself to get excited about saving money? Maybe you’re distracted by all the shiny things you want right now, or maybe you don’t see the point when you have a credit card.
Saving doesn’t come naturally to many people because it’s a mindset you have to get into. I know, it’s hard to shift your mindset to focus on saving money when you’re already focused on keeping up with the Joneses and YOLOing. Fear not, there are a few ways to get over this hurdle if you’re sick of feeling broke.
Realize Credit Cards Don’t Give You Freedom
Let’s tackle the first obstacle most people seem to deal with: Thinking that you can afford something because you have available credit.
It’s very easy to fall into the trap of whipping out your card anytime you want something. Why wait to save when you can buy it now, on credit?
Well, did you know the average interest rate for a credit card is well over 10 percent? That means if you buy a pair of boots for $200, and don’t pay the balance off in full by the end of your billing cycle, you’ll pay extra due to interest.
Depending on how much your minimum payment is, it could take you months to pay off that purchase, and it will end up costing you more than $200 as interest accrues daily. Credit is not free money.
If you saved the money, you could pay cash, or pay off your credit card balance immediately, and avoid the interest charges. Plus, you’ll escape the expensive cycle of debt. There’s no reason to pay more for things because you can’t wait to have them.
Saving for purchases gives you options. If something you’ve been eyeing happens to go on sale, you can use your savings and take advantage of the opportunity without worrying about how you’ll pay for it later.
Credit card debt is restrictive because it leaves you owing money. Your paycheck isn’t even fully yours! Saving leaves you free to decide how to use all of your money.
Think Long-Term Instead of Short-Term
Another reason why millennials struggle to save money is because they’re thinking short-term. As long as they can stretch their dollars until their next paycheck, they’re good.
Isn’t that a stressful way to live? What if an emergency happens and you can’t afford to make rent? What if you lose your job?
Saving money provides you with a priceless cushion in case of hard times. Emergency expenses are already difficult to deal with, you don’t need to add credit card debt into the mix while recovering.
Getting into a long-term mindset with your money will save you a lot of hassle down the road. It pays to start saving now, even if all you can save is five dollars.
Get Crystal Clear on Your “Why”
We’ve touched on this before, but the best way to motivate yourself to save is to get clear on why you want to save, or what you want to save for.
Saving just to save is meaningless, and without direction, your money isn’t going to work for you as well as it could. It’s the equivalent of your parents telling you to do your homework when you were younger. You know you should do it, but without a strong reason why, you won’t get there.
Review your financial goals and develop a concrete reason to save to push you toward this mindset.
Develop the Habit of Saving Money
Last, but not least, one of the easiest ways to ease yourself into a savings mindset is to automatically put your money aside. If you set up automatic transfers from your checking to your savings account, you won’t even have to think about saving, and you’ll still reap the benefits.
As your balance grows and you gain momentum, you’ll be hard-pressed to ignore it. Many people have caught the “saving money bug” this way, especially when apps such as Digit make it incredibly easy.
The Savings Mindset Isn’t Elusive
Get rid of your limiting beliefs about your money management skills, realize that living off of credit isn’t sustainable, and start working toward a better financial future.
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