Now that summer is coming to a close (if you live on the northern hemisphere), you are probably checking the damage that all those summer parties, trips and dinners did to your budget.
We get it, summer is the time to party and real sweating. Sweating about the small stuff like money should come later… But now, the summer has almost ended and you are stuck with sweating about the small stuff. Like money.
This guide is more about discipline than it is about changing the income and outcome factors deliberately. We’ve read some saving guides that began with “Earn more money” or “Start selling stuff you don’t need” and we said “This guy is obviously a banker!”. This guide is different.
Get yourself together!
First thing’s first – do not panic. Money problems are more common than a common cold. We are all in the same boat. The important thing is to get your spending habits recorded, so you know what the problem is. Some people don’t understand where their money is going and they just start hacking at costs left and right. Which is just silly, you need to eat.
However, did you know you are spending way too much money on collectible dolls from the 18th century? By which we mean if you own ONE 18th century doll, you are spending too much money on them. The perfect amount of 18th century dolls a person should have is zero. There you go. You are welcome.
Connect your bank, import data from a file or enter the expenses in the app so you can have a clear, categorized view of all your financial ins and outs.
Keep adding everything you make and spend into the app to get a complete picture of your finances.
Create a separate savings account
Yes. Trust me. You need a separate account where you will move the money you are saving. No, you will not dedicate that portion of the budget mentally. No, you will not be extra careful. This is not junior high. Create a dedicated account for all the money you are going to save. Period.
Create a new account in the Toshl app and give it an appealing name so you will feel good moving money from your checking account to it. Do not call it “Savings”, call it “Ass kicking account!”
Focus on the goal!
OK, you cannot just save money. I mean, you can, but saving money is like saving the world. You will never finish, plus everybody will tell you that there is a million things that need saving more urgently. Ugh, whatever Shaunna. But they are right – you need a goal. A target. A sense. But a goal can be anything – a new pair of shoes, financial independence, a motorcycle, being debt free, a new laptop, a house.
Make separate financial accounts for your particular saving goals in Toshl and track your saved-up balances. Make sure you put the money aside on your bank account or in an envelope when dealing with cash.
Set a monthly budget and set up savings
You cannot just go ahead saving money. You need a goal inside a goal. Sort of like a budgetception. Only without Leonardo DiCaprio. Set a goal for how much you’ll save each month and use budget tracking to limit your general spending and make sure you always put the savings amount on the side. There is no point over-promising yourself and then never actually committing that much money.
The River flow graph in the Toshl apps can help a lot in steering your money flows each month. You’ll see how your budgeting is going and how much you’ll save if you stick to it.
Automate the process
Seriously. The robots are coming for your job anyway, you might as well give them one and task them to take money from your checking account and put it in your saving account. If you have to do it by hand, it won’t feel as good. Yes, some things feel better when you do not use your hand.
Set up automatic transfers between your checking and “ass kicking” (savings) account. Do the same on your online bank, or set a reminder to actually put the cash aside.
Save before you spend
This might be tricky, but time your saving robots with your incomes. If your paycheck is due on the 10th, make sure the robots do their thing on the 11th so that you will learn to handle the rest of the amount till the next month. If you want to play on a lower difficulty, tell the robots to move the set amount the day before the paycheck.
Same thing as before – add a reminder to transfer to savings in the app so that the app keeps you on your toes.
Bonus: Change your spending habits
OK, up until now tips for focusing on discipline. This last one is different.
Maybe you should evaluate your expenses report and think about it. Spending too much on cable? Using outdated package deals that are not as viable anymore? Still having too many of those 18th century dolls? Adapt and see what happens.
You should make a ritual out of reevaluating some business deals every once and awhile anyway. Mobile phone providers, internet access providers, banks… these are the deals you made once a thousand years ago and then just got stuck with them because you just could not be bothered. But you should be!
Providers often count on your passive behaviour after the initial excitement about discounted prices even when the contract expires. So mark the expiration date on your contracts and go hunt for better deals when the time comes.
Create annual reports or even annual budgets on individual costs tag so you can see how much money did you spend in total and then compare new offers to see if they are worth your time and money.