It is safe to say that the year 2020 will be remembered forever as one of the most challenging years the world has had in decades.
With a global pandemic affecting the entire population, many aspects of our lives changed drastically, and we had to find ways to adapt as quickly and smoothly as possible.
It’s no doubt that the pandemic has had an enormous impact on the financial aspect of our lives, both personally and on a business scale.
However, with the right mindset in place, we can turn our negative experiences into an opportunity to learn, grow and improve our behavior, so that we can be better prepared in the event of a crisis.
With a new year approaching, we could start this chapter on a brand-new page, with new habits and a new way of thinking about our finances.
Below are some ways that you can cultivate a money saving mindset which will be a catalyst for your financial success and freedom.
Although there is never anything wrong about saving money in general, having a specific goal to work towards will ensure you stick to behaviors that will help you achieve those goals.
So, start by thinking about your short- and long-term goals and why it’s important for you to save towards them. With these goals in mind, you can consciously work on improving patterns of unnecessary spending, allowing you to spend less and save more.
Bookkeeping, budgeting and reconciling may sound like a drag to most, but these are habits that keep you at least one step ahead of the game.
It’s much easier to make adjustments when you have a clear visual of your current habits. Without reviewing your spending, you won’t know where you can improve.
Another way to be accountable is to automate your monthly deposits into your savings account and towards paying off your debts. Automating these transactions will prevent you from forgetting to save or falling behind on your debt repayments.
Although annual increases may seem like a foreign concept in 2020, some may still be lucky enough to be on the receiving end of a raise.
If you are one of these people, forget about the idea of spending more now that you will be earning more. If you have been getting by comfortably as you are, be sure to use your increase to contribute to paying off your debt sooner, increasing your monthly bond repayment slightly or increasing your monthly savings contributions instead.
This cannot be stressed enough. Distinguishing what you want versus what you need can be the single factor that you are missing in your money saving efforts.
Once you take the time to categorize your wants and needs, you may be surprised to see how much of your spending happens impulsively and on things that you simply do not need.
How do you establish what it is that you need? You ask yourself what helps you survive? What helps you achieve your goals? What will help you avoid paying out of pocket for unexpected expenses? These are things that you need and should take priority when it comes to you handing out your hard-earned money.
To some, saving money comes naturally. To others, it may be challenging. If you find it hard to commit to saving money every month, don’t be afraid to ask for help from someone you trust.
Having someone to call to help you discern whether you need or want something can really help you form better habits. This person can also offer some objective perspective for you during other difficult moments of decision-making.
It could be useful to share your goals and aspirations with the person you choose to call for advice as he or she can remind you about what these are when you are tempted to make a financial decision which could potentially hinder you from achieving those goals.
There is an important psychology behind the concept of accomplishment in that when you are able to see what you have accomplished, you become motivated to accomplish even more.
This is applicable to your money saving journey as well. By tracking your progress, you get to see what you have achieved in terms of your savings goals, and you will immediately be motivated to carry on working towards your next goal.
Additionally, you also get to see where you have fallen short and you can then make adjustments which will help you get ahead once again.
We know that finding your way around finances can be difficult, and learning new behaviors takes time.
Therefore, our financial advisors in Johannesburg offer tailor-made financial services to help you develop and implement money saving habits which will not only help you reach your future goals but will also ensure financial security during hard times.
With a new year approaching swiftly, now is a good time to rethink and redesign the way you do things, and our financial planners can help. Contact us for more information.
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