Would you like to be better at saving and investing your money? For a lot of people, saving and investing is hard to accomplish, so they just don’t do it. Yes, depending on your financial situation, it can be tough, but if you take time to build habits that revolve around your goals, you will reach them in no time.
Here are four habits to learn that will help you on your saving and investing journey:
Always Have a Plan
First and foremost, it is essential to have a clear-cut plan for your money. Of course, this includes a budget, but more importantly it requires specific goals for saving and investing. By figuring out how much you actually want to put in your savings accounts or invest in the stock market, it will give you an idea of how much you need to hold back each month for those specific areas. You can pick any amount you want, just make sure that it aligns with your goals. If you don’t have a whole lot of extra money to save or invest, that’s ok! Any amount–even small ones–will add up over time. It’s better to put something in your accounts than absolutely nothing. Just make sure you have a plan in place so that you can know where your money is going.
Now that you have a secure plan in place for your money, the next habit to focus on is regularly contributing to your savings and investing accounts. You can do this the easy way by getting it automatically deducted from each paycheck and put into the appropriate place, or you can manually do it yourself. Whatever you decide, make sure you do it in regular intervals. Maybe you don’t want to do it every paycheck–that’s ok. Just pick a regular time period (every 2 weeks, once a month, etc.) and contribute your set amount every single time. You will be amazed at how fast your accounts can build up with just a little consistency.
Live On Less
This habit isn’t as fun as watching your accounts grow in wealth, but it’s definitely necessary. To save and invest money, you have to live on less than you make. It just makes sense. If you spend everything (or more) that you make, you can’t possibly have money to save or invest. This is where budgeting rears its head again. Stick to your plan you made in the first habit we discussed, and cut out the things that are not pushing you toward your savings goals. If money is tight, then cut out the superfluous spending. Things like eating out regularly, going to the movies, getting your nails done and even cable are not necessary to live. Budget your living necessities (house, utilities, food, transportation, debt) first, budget your amounts to put into savings and investments second, and THEN use what’s leftover for the fun categories. If you make saving and investing a priority over the fun items and learn to live on less than you make, you will accumulate wealth easily.
Stick With It
At times sticking to your budget and goals will be annoying. You will really want to use your money that was set aside to invest for an upcoming trip or something else that is fun, but if you want to watch your savings and investments grow, it’s essential to stick with the process. You will encounter hurdles along your way, but sticking with putting a little money–no matter how small–in your accounts each month will build your saving muscle and eventually turn into a habit that you do automatically without even thinking about it. Just like with any goal you set in life, stay consistent and stick with it, and you will see results.
Developing financial discipline can be a hard process to go through. What many people don’t realize is that if you do a little a time, you are much more likely to see results than changing everything at once. If you practice these four actions regularly, they will become habits that you will have for a lifetime.