reminderSaving money has little to do with personal finance or how well you budget. You can have the best intentions and the most sophisticated budget in the world and still overspend.

Saving money is about changing spending habits into saving habits.

When you focus on changing the little every day spending habits that allow your money to leak out of your wallet, your bank balance will automatically be healthier at the end of the month.

And that’s the key to making saving money easy. To make it automatic. You have better things to do than remind yourself every waking minute that you should be saving money. We live in a world where spending is expected. You want to make saving second nature instead.

What are spending habits? That will depend on you. Everyone is going to have different spending habits. If you have been tracking your expenses, then these spending habits will pop out like flashing signs. If you’ve never tracked your expenditure, then I recommend trying it, it is certainly an illuminating exercise.

To make forming new saving habits as easy as possible, here are a few habit forming tips.

1. 21 Days

Conventional wisdom states that it takes 21 days to form a new habit. 21 days seems a bit specific and doesn’t allow for how hard the old habit is to break and how easy the new habit is to form. The point is, allow a bit of time. Don’t expect saving habits to form overnight.

2. Work on one habit at a time

It’s the beginning of the new year, you’ve done your budget and you’re eager to get going. Hell, if you start taking your lunch to work, and your own coffee, and not eat takeout anymore, and stop texting every hour, and only have 2 minute showers, and turn everything off at the power point…you’ll save a packet, right? And get burnout.

I want you to still be here at the end of the year, where we can look at our results and celebrate. So work on one habit at a time. Either pick the most important habit to work on (the one that is going to pay biggest dividends) or pick the easiest to do (to give you a motivation boost).

If you spend impulsively, one of the first habits that can be really useful is asking yourself “do I really need this?” every time you go to buy something, so that you’re aware of your spending, it becomes conscious act.

2. Analyse

We have habits for a reason. If you buy a cup of coffee everyday on the way to work, it’s probably because you enjoy drinking a coffee every morning. What about buying new clothes? Are you an emotional buyer? Is retail therapy? Does your sense of identity come from how you dress? Do you just like new clothes? Do you buy takeout because there is nothing quick and easy to prepare in the kitchen for nights when you’re tired? (That’s me!)

Know what you spend your money on and why. This allows you to decide what spending is really worth it and what isn’t and working out ways to prevent spending money on stuff that you feel isn’t worth it.

3. Know your triggers

What are your spending habit triggers? Maybe you shop when you’ve had a bad week at work? Do you get takeaway when the fridge is empty?

Studies show that the environment plays a bit part habitual patterns. For example, if you take the same route to work everyday and smell the coffee brewing, then it triggers an automatic ‘buy coffee’ response.

Knowing your spending habit triggers means that you can formulate an action plan to avoid your spending habits.

3. Create positive habits around those triggers

So you’ve had a bad day at work and usually you would go and do some shopping. What positive action could you take to replace the shopping habit? Maybe you might go have coffee with a friend or spend more time on the hobby that you enjoy? The key is to recognise your trigger and to create positive actions in response to that trigger that replace the old spending habits.

4. Start small

Some people can go cold turkey, but for most of us, it’s more effective to adjust to our new habits a little at a time. So rather than saying, “I’ll never dine out again!” How about, “we’ll only dine out once a week”, and see how that goes.

Give yourself a spending allowance (hide the credit card) for those things that you don’t want to go without.

5. Make it routine

You already have set routines in your life. Things that you do in a certain order, or at certain times of the day, everyday. For example, if you eat breakfast everyday and now you  need to remember to take medication, then you might put it with your breakfast things and take it while you’re drinking your usual morning juice.

Slip new savings habits into your existing routine so that they are easy to remember to do.

One of the things about keeping a budget and tracking your expenses is that you have to sit down for a few minutes each week in order to keep up to date. This is where most people fall down. However, if you already have a routine where you pay bills every Thursday, or do banking every Tuesday, or even check your email every evening, update your budget at the same time. The more often you do it, the quicker and easier it is to keep your budget up to date.

6. Replace old habits with new ones and make the new habit easy

Back to the coffee example. Just say your new savings habit is to take your coffee in a travel thermos rather than buy it. You will want to have a thermos on hand, and coffee at home, and have it all ready so it’s quick and easy to brew in the morning.

Take a little time to set yourself up for success.

7. Make the old habit hard

At the same time, to avoid buying coffee, you might choose to not take change with you to work. It’s easier to break a habit if you have to go out of your way to do it. You want to make it a hassle to do your old habit, but easy as to do your new one.

8. Remove temptation

Every dieting guide on the planet suggests filling the pantry with healthy snacks and avoid storing any junk food in the house whatsoever. Tim tams no longer call like sirens in the stark glow of midnight fridge light. So too with spending temptation.

Shopping has never been a problem for me, I hate shopping centres. After spending 11 years in retail, a shopping centre is my idea of hell on earth. So we hardly ever go. If you love to shop and you’re tempted to spend, then avoid the shops as much as possible, and do something else instead. (Note to self: un-bookmark eBay).

9. Give yourself reminders

We do a lot of stuff on autopilot. Sometimes we need a little memory jog to switch us on and make us conscious of what we’re doing.

Stick a sticker on your credit card reminding you to ask “do I really need this?” Maybe put a note on the phone reminding you to call during off peak hours, or make a competition to remind the kids to turn out the lights when they’re not in a room. These reminders help during the period before your new saving habits become second nature.

10. Jump back on the wagon

You have bad days. At least, I have bad days. However, these days shouldn’t mark the beginning of the end for your savings plan.

When you find you’ve spent more than intended, put it in your budget and move on. Make tomorrow more successful.

11. Moral Support

When temptation calls, it can be useful to have someone talk you out of it, or to provide a distraction. Make sure that person is aware of your goals and is willing and able to help.

12. Just do it.

Trite I know. However, sometimes this is all we have to fall back on. What are your true goals and passions? How are all the little spending leakages preventing you from attaining what you really want? Want a holiday, but can’t get your savings on track, because of (fill in the blank) spending? Sometimes it just comes down to saying no to the things that aren’t important.

Step 5 – Change a Spending Habit to a Savings Habit

You want to change as many spending habits into savings habits as you can over the course of the year. For January, pick the most obvious habit for you to start with.

If spending unconsciously is your spending foible, start January with the “stop spending habit” and remember to ask “Do I really need this?”

If you’ve arrived at this page via a search engine, your missing out on the complete Step by Step Guide From Money Blues to Savings Success. This article is part of the Frugal and Thriving Newsletter. To read the rest of this newsletter and find out more, you can sign up for the free newsletter here.

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