The 5 Parts of the Money Saving Process

posted 10/22/2014 in General

Magicians like Harry Houdini have been astounding audiences for years with their seemingly impossible feats of magic, misdirection and secrecy. Whether or not you believe that sawing someone in half and putting them back together is actually possible, we do know for a fact that nothing about your finances, especially saving money, is able to be cured by waving a wand or yelling “Abracadabra!”

Saving Money is a Process

There is more to saving money than throwing some cash in a savings account and calling it good. It takes time, thrives on consistency, requires balance and realism and also has a psychological aspect to it as well. Let’s take a look at each of these areas of saving a little more in depth.

The Psychological Aspect

Let’s say you want to save $3,000 for a down payment on a new vehicle. That’s no small amount of money for most people. One of the main reasons so many savings plans fail is that it seems like too daunting of a task. “How do I save money when I have other expenses to take care of?” The key is to not try and save everything at once, but work toward it inch by inch.

The Time Aspect

Come to terms right now with the fact that saving money takes time. You’re not going to be able to stash away $500 at a time (unless you get a bonus or additional funds from somewhere else) because of your recurring expenses. Bit by bit, $25, $30 or $50 at a time is what it takes. Saving isn’t about instant gratification, it’s about doing things consistently so that one day, when you need it, you can look at your savings account and get your gratification then.

The Consistency Aspect

Saving money thrives on consistency. It can be as easy as automatically transferring a set amount from your checking account to your savings account every week. However you go about saving money, try to keep it as simple and automatic as possible.

The Realism Aspect

Living a responsible life and saving what you can = good. Starving yourself and living desperately = bad. You need to be realistic about your saving, both in what your target is and how you’re going to get there. While you may not be able to eat steak every night, you need to make sure your necessities such as food, housing and health are taken care of.

The Balance Aspect

As we’ve said, consistency in your savings is a good thing. But that doesn’t mean you can’t live a little and reward yourself responsibly. So, don’t be afraid to go a little outside of your budget once in awhile. Just make sure it’s appropriate spending; taking your spouse or family for ice cream after a good day at work is fine, going out and purchasing a $500 smart phone when you have a year old model is not.

Whether you are saving in small amounts or can afford to stow away a little more cash, Lincoln Savings Bank can help. Just visit your nearest LSB location today to find out how.

Lincoln Savings Bank, Member FDIC

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