How to work towards our dreams in uncertain times
You probably have that feeling like you need to save a little more. It may also feel like living gets in the way. So what do you do? It may sound strange, but life's changes may be the thing that helps you figure out how to save money each month.
Life changes fast, and that makes it easy to fall out of out of old spending habits – going out, shopping trips, and more. This opens the door for you to start building saving habits that will help you work toward your down-the-road dreams. Whether that’s a house, a trip, retirement, or whatever you're dreaming of.
It’s a good time to make sure we have an emergency fund in place to handle life’s detours. That means anywhere from 3 to 9 months of living expenses. This will help you survive a job loss, a furlough, or whatever life throws at you.
Now, on to those dreams.
To get started on saving for those dreams you have, compare your spending this year to last. Look at your bank account statements from this month and from one year ago. What do you notice? Did you spend more or less? And on what?
If you spent more, it may be time to identify which categories have started creeping up. Often, these increases happen gradually rather than all at once. Take a closer look at areas like dining, subscriptions, or convenience spending, and consider whether those increases align with your priorities.
On the other hand, if you spent less, that’s an opportunity to understand what worked in your favor. Did you cut back intentionally, or did certain expenses naturally decrease? Recognizing these patterns can help you reinforce positive habits and make more intentional decisions moving forward.
Next, choose one spending category and take a closer look at why your expenses were lower, whether that was this year or last. Consider what changed during that time. Were your habits different, or did your priorities shift? From there, add up what these lower-cost choices actually saved you, and think about how you might intentionally incorporate more of them into your life going forward.
This doesn’t mean eliminating the fun things you enjoy. It simply means finding a balance by mixing in more budget-friendly options. Over time, those small adjustments can free up meaningful amounts of money to put toward your goals. Imagine how much faster you could save for a down payment on a house, a trip of a lifetime, or any of the dreams you’re working toward.
Congratulations! You have just identified what you could save. And you’ve started creating a saving plan.
Start putting that money into a savings account
Now that you know how much you can put aside, it’s time to find the right place to put it.
You may have a tendency to let money build up in your checking account where you deposit your paychecks. That can be a problem for a couple of reasons.
- Money that collects in our checking accounts tends to get spent
- You could be missing the chance for that money to work harder for you by earning interest
Find a savings account that rewards you with a competitive interest rate. It’s even better if it connects to your checking account so you can easily or even automatically transfer money. Then, set up a monthly transfer of the money you identified that you could save. And set it up for the beginning of the month – before you’re tempted to spend that money. You’re ready to get started saving.
For more tips and other great savings know-how, check out the free Ruling Your Tomorrows ebook.
