When my ex-husband and I were first married, we were sure that we couldn’t save any money.
We were positive that didn’t have any extra to set aside. We made excuses for why we couldn’t start saving money, and told ourselves we’d start someday — when we had more money.
Later, I learned that saving habits aren’t about how much money you have. It’s about what you do with your money. Even if you think you don’t have enough to start saving, you might be surprised to discover that it’s possible, no matter how little you have.
Needs vs. wants
When I decided that I was ready to start saving, I started by looking at my spending. I was certain I didn’t have any money to spare, but I soon saw that I was spending money on:
- Cable TV
- Eating out for dinner twice a week
- Buying lunch at the college cafeteria every day
- Various impulse purchases at the grocery store
Even though I thought I was only spending money on things I needed, there were unnecessary items using up my resources.
While you don’t need to cut all of your unnecessary purchases, it helps to draw the line between needs and wants. Be honest about your spending and what “counts” as a need. You might be surprised to discover that your wants are creeping into your needs column.
After reviewing our spending, my husband and I decided to eat out just once a week, only buy items on the grocery list, and limit lunch in the cafeteria to twice a week.
Those money saving habits freed up cash that we could put into savings each week. Pretty soon, we were well on our way to a solid emergency fund.
Even if you’re sure you can’t cut back anywhere in your budget, consider taking another look. See if you can cut out some of the wants so that you have at least a few dollars a week to set aside for the future.
Start small and build
Saving habits start small. There is no amount too tiny to save. Start by seeing if you can find one dollar per day. Put that dollar in a jar. Each week, go to the bank and put the seven dollars you’ve accumulated into the bank.
It seems like a small thing, but it’s important. The idea is to build the habit, not have enough money to replace your income immediately. Once you get in the swing of saving, you can build on your efforts.
As soon as you comfortable with setting aside one dollar a day, look for a way to double it and set aside two dollars a day. Part of the fun of saving this way is the fact that pretty soon you start looking for ways to come up with more to save.
For some savers, putting the money in a jar acts as encouragement. You can see the money build up over time and it’s exciting to add more.
However, at some point you might be tempted to raid the jar and use the money for something else. Regular trips to the bank to put the money out of sight can reduce the likelihood that you end up spending the money.
Make it automatic
If you don’t like the idea of bringing money into the bank, set up automatic transfers to simplify the process. Here are some of the ways you can automate your savings habit:
- From your paycheck: Ask your HR department if you can automatically divert some of your paycheck to a savings account or retirement fund. It’s hard to miss what you don’t see, and saving just a small amount from each paycheck will add up over time.
- Automatic transfer: Every month, I have a certain amount of money transferred from my checking account into a savings account designed to help me pay my quarterly taxes. Whatever your savings goal, automate a transfer for $50 each month to start. Later, increase the amount of your transfer.
- Use an app like Digit: One of my favorite tools is an app called Digit. The app connects to your bank account and uses an algorithm to analyze your income and spending habits.
Each day, Digit figures out how much money you could be saving. Whether it’s $2 or $57, Digit transfers the money. The company guarantees it won’t overdraw your account.
With the help of automation, you might be surprised at how fast your savings account builds. Combine strategies, and you could build your savings faster.
Good saving habits lead to long-term financial health
The key to forming savings habits is to move beyond the mindset that says you need a certain amount of money to make saving “worth it.” The fact of the matter is that any amount, no matter how small, is worth saving.
Saving habits help you establish your long-term priorities. If you make saving a priority, that’s a small habit that can grow over time. The important thing is to shift your way of thinking and start a habit that will help you build wealth over time.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|