This is the last of my three-piece series on saving. In the first segment I covered the importance of saving, you can read it here. The second piece discussed different accounts that could be used for saving money, take a look here. In this piece, I want to talk about mindset shifts to help you save money. When you are living on a budget, it can be hard to find money to dedicate towards your savings goals. But doing so will create peace of mind as you know that you have allocated resources to your savings goals and have money when the need arises.
Saving is a process and sometimes finding money to save is tricky. When I have clients tell me that there is no way they can find any money to put towards saving goals each month, I shift the lens from spend vs. save to tradeoffs and values. I am a firm believer in the concept that, other than your necessary expenses each month, what you spend your money on should be a reflection of your values. I understand that people need shelter, food, and clothing. This is why there is space in a budget for fixed spending or needs. But there is also a category in the budget for flexible spending, often referred to as wants. This is where most people can find places to save money. I say that the money you save comes down to values because in the wants category, you have the ability to choose. Those choices should reflect the things that are important to you.
There is a great debate going on across the personal finance world today about coffee. Some say that if people just drank less coffee at coffee shops, they could save money for retirement. Those who are spending money on coffee say that coffee makes them happy. To me, this is the values component of personal finance. If you value coffee, that’s ok, and you can definitely add it to your budget. But if you are looking to maximize your savings, as you look at your flexible spending you need to find something you value less than coffee to give up or cut back on so you can have your coffee and still save.
Finding places in your budget to save should be seen as an exercise in supporting your values and life today, while being mindful of future needs and wants. And it doesn’t have to start big. Even focusing on savings as little as $10 a month (2 less trips out for coffee, a few less fast food meals, or one less movie at the theater) can get the ball rolling. This also demonstrates that where savings comes from can vary from person to person, it doesn’t all have to come from coffee. As people start to set aside small sums and see progress on their goals, finding more money to put aside each month becomes easier. I have seen so many lists of ways to save money, some are common sense and others are downright zany. Fundamentally, I think that each person and budget is different. That’s why they call it personal finance right? But what I have learned through helping clients and through my own personal budget struggles is that determining what monthly spending is important and what you could do less of or do without is the best place to start finding money to save.