Here at Money Moppets, our passion is to help parents teach their kids about money so that they can be confident with money as they develop into adults. For those parents who are confident with money many see the value of teaching their kids and may just need a little help on how to approach it. Those that aren't confident may feel a little daunted. If this is you don't worry, we are here to help and if you have any specific questions, comment on this blog post and we will do our best to give you some helpful tips.
One way to test your confidence is by how you approach saving money. Most of us know that saving money is an important part of life if you want to have a comfortable living. Whether you want a car, a house, a holiday, or the latest toy, saving up is key. It is not surprising that many people struggle with saving and end up giving up without reaching their goals. However, there are some that nail it. So, are you a confident money saver? Test yourself by reading below the 5 common habits confident money savers exercise.
1. Know What You a Saving For?
“A goal without a plan is just a wish”. This saying couldn't be truer when it comes to saving money! The first step to success is to identify what you’re saving for. Is it a trip to Paris? A deposit on a house? Money for your child's education? Knowing what it is you want and having a clear goal will help you to stay on track. Have a picture of your goal front and centre so you will see it everyday to give you that extra motivation. Without an end goal in mind, it’s easier to stray from the saving path and spend money impulsively because – why not?
2. Know When You Need It By?
Now that you know what you are saving for, it's time to determine how long you have to save it. This time period could be set for you like when your child reaches school age or a timeframe you create yourself. If you are choosing the timeframe yourself, set a realistic but also a challenging goal. If you give yourself too much time, there won’t be enough pressure to motivate you and you will be less likely to stick to your plan. If you don't give yourself enough time, the goal seems unattainable and you will likely give up.
3. Have a Savings Plan
Once you know your savings goal and your timeframe, take a good look at your financial situation and how you've been spending and saving your money. Determine how you can improve your budget, where you can save money or get a better deal, where you can cut back and what ‘needs’ are you spending money on that are really just ‘wants’. Saving money can mean big changes, like moving house or getting a new job. In most cases though it means small adjustments to your lifestyle like bringing your lunch from home rather than buying it at work. You might also want to think about how your savings can work harder for you, either in the form of a high interest savings account or investing in shares. All successful savers work out a plan to reach their savings goal, and stick to it.
4. Tell Others Your Plan
Your family and friends can be a great support in helping you achieve your savings goals. It’s psychologically proven that sharing your goals helps you to attain them, by adding the pressure of making yourself accountable to your peers. You can make your goals feel more 'real' by sharing them. Your social group can cheer you on, offer advice and show their disappointment when you’re falling behind.
5. Review Your Progress - Regularly!
Set regular milestones along your savings timeline, either weekly or monthly, and focus on reaching those goals. If those milestones are big achievements, think of doing something to reward yourself. Keep track of the goals you have reached and how you are progressing. Many banks have savings tools and calculators specifically for this purpose.
So how did you go? Do you practice these habits?