Welcome to Day 4 of the Money Management course!
As we discussed yesterday, living in the present is important to your overall happiness. On the flip side, enjoying the present should not come at the expense of the future. If we don’t balance living today and planning for tomorrow, we inevitable sacrifice today. It could result in unnecessary stress, frustration and essentially rob you of a life you love.
Yesterday we covered budgeting. As promised, today, we will cover saving for the future.
Putting money aside can be challenging. Even the best of us get carried away enjoying life.
What if I told you saving never had to cross your mind? That you could completely forget about it. That you could put money aside without even knowing it. Even better, saving without sacrificing.
It can be made simple! Here are a few tips to get you to start saving.
Automatically round your bills up
Think of all the purchases you make on a daily basis. How many of those are exact to the dollar? Probably very few to none.
Imagine the spare change on everything you buy turning into savings. Chances are, that would probably stack up to a nice little cushion of cash.
There are a number of apps that will round your bills up and save the change for you. You never have to think about it or make any effort to put money aside.
SET IT AND FORGET IT!
Check out the app store, there are a ton of options out there. If you’re feeling a little overwhelmed, I would recommend Acorns.
Acorns will set your spare chance aside AND invest it for you. Every dollar is automatically diversified across 7,000 stocks and bonds to improve returns and reduce risk.
Not only will you end up with savings from your spare change but those savings will grow effortlessly.
Two birds one stone!
Forget about how much and when to put aside
It can be difficult to know exactly how much to transfer to your savings.
You might not be sure how much you need to make it to the next paycheck. You may even end up putting nothing aside because of that need for planning your finances.
Worry not! There’s an app for that!
Digit uses an algorithm to determine the right amount to set aside everyday. The calculation is based on your income and spending.
It takes the thinking away. The algorithm automatically customizes your savings based on you’re day to day spend. You’ll safely make it to the next paycheck without spending time planning,
Set it and forget it! Next thing you know, you’ve built up savings without doing anything.
Get the best of both worlds
If you liked both of the above apps, then you’re going to love this next one.
The Chime mobile banking app allows you to set aside 10% of your paycheck. You can also program the app to round-up purchases and put the difference into your savings.
Unlike Digit, it does not use a fancy algorithm to determine how much should be put aside. You have to calculate what you’re comfortable setting aside. Once you’ve figured that out, you can tell it to automatically take that amount out.
Let the savings begin!
Once you start to get the ball rolling, saving can become addictive. Feeling that sense of security. The freedom to spend when you please because you’ve got money in the bank.
Using technology to help me get a sense of those benefits was a game changer for me. Once I felt what breaking the paycheck-to-paycheck cycle was like, it was much easier for me to take control of my money and save more proactively.
It’s only going to get easier from here!
Start feeling what it’s like to have money in the bank and you won’t want to give it up!
Tomorrow we’ll cover how you can keep score to stay ahead of the game.