Saving money can be very simple, if setup properly. With today’s technology your job can automatically send your hard earned money to multiple bank accounts without you having to do anything. This is where you can trick your brain.
Open another account with a different bank than one you have. Take that debit card and put it somewhere safe and essentially “forget” you have it. By allowing the portion you want to save directly go to that bank account, you lose the ability to count it in your budget for spending purposes because it is difficult to access. If you aren’t able to save the amount you want to, look hard at your expenses and determine what is a need vs a want and start cutting accordingly.
I do this with one of my bank accounts. It is a little emergency fund, and if it starts getting too big, I can easily take money out of it and use that for investing. While saving is necessary, don’t save too much.
Being honest, just saving money isn’t good. In fact, it is actually counterintuitive to the original purpose of saving money.
In reality, a savings account is constantly losing its value due to inflation, the increase in general level of prices over time. The average inflation rate is estimated to be roughly 3% per year. This is why you hear our grandparents say, “In my day a gallon of gas cots $.10 and now it is over $3.” Considering the average interest rate on savings accounts is .01%, every year your money loses about 2.9% of its value. Also, by keeping money in a savings account, not only is your money losing value but it isn’t allowed to grow. While I do think saving is important, manage it instead of letting it sit idly.
Allow your money to grow by exploring different investments. There is the stock market, peer-to-peer lending, crowdfunding real estate, precious metals, cryptocurrency, buying physical property and renting it, and many, many more.. Be creative when making money. Allow your brain to explore possibilities and do research. Education about financial literacy is more important than most schooling. Your financial literacy is tied to everything in your life and no one but you can take responsibility for it.
TLDR:
While saving is good, it will never allow you to grow because inflation lowers the value of your savings. Instead, learn to invest and educate yourself in the financial world.
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