Getting rich quick is a dream that many of us have. But unfortunately, riches usually don’t come quickly. Unless you were born with a silver spoon in your mouth, hit the lottery or inherit a lot of money, you are far better served by working at a slower pace and saving your riches one small step at a time.
Saving money is hard work. We have to plan ahead and fight the urge to spend it now. In truth, we have to talk ourselves into delaying gratification when it is much easier to enjoy the money now. Small, consistent action steps can lead to financial success. Changing our saving behavior takes dedication. Start by doing the same thing over and over again to develop the savings habit. Let’s look at some easy strategies to get us in the habit.
Place $2 a day in a jar, along with pocket change. That will net you between $60 and $100 a month. Over the course of a year, that adds up to $500 to $1,200. Dedicating that money to beginning a savings account or paying down debt will improve your financial lot.
Save all $1 bills or $5 bills or whatever denomination you choose. This develops a habit so you don’t have to think about saving. It becomes mindless to put a certain type of money in a certain place.
Save by the week. I’ve done this strategy over the past two years to save for my grandkids’ college. On the first week of the year I put a dollar in a jar, the second week I put in $2, and the third week $3 and on through the year. At the end of the year, I will have saved over $1,300 in each jar. And the most I’ve had to come up with at any time is $52.
A friend of mine used the same strategy but reversed it. The first week in January when she was very motivated to save, she put $52 in the jar. The second week she put in $51. By the end of the year when she was spending for Christmas, she was putting in very small amounts. The same money was saved over the year, but the descending order worked well for her.
Save by the day. In the same manner, develop the practice of saving by the day. On the first day of the year, put a penny in a jar, the following day two pennies. By the simple act of matching the number of pennies to the day of the year, you will save over $668 in a year.
Many of us no longer handle much cash and would prefer to set up an automatic system to save. Set up a direct deposit into your savings account. Whether a portion of your paycheck automatically goes into the savings account or you have the bank take out a certain amount on a certain day each month, your savings will automatically grow. The beauty of this method is that you can’t miss what you’ve never seen.
No matter what small step you take to develop your savings habit, it is a step in the right direction. Whatever you can do to improve your financial health is better than doing nothing. You’ll get there, one small step at a time.
Roxie Rodgers Dinstel is associate director of Cooperative Extension Service, a part of the University of Alaska Fairbanks, working in cooperation with the U.S. Department of Agriculture. Questions or column requests can be e-mailed to her at firstname.lastname@example.org or by calling 907-474-7201.