Having the right money mindset is essential — not only for your present self but also for the future. Only by changing your money mentality from spending to saving will you be able to achieve your goals in life.
Whether you are looking to start a new business, build a nest egg for retirement, pay off your student loans, or be in a position to take a trip abroad whenever the fancy strikes you, those dreams can only come true after you stop spending and start saving.
Our generation, in particular, is bombarded with opportunities to spend. From adverts and product releases to an active lifestyle and a society that prefers spending to saving, it can be challenging to change your mindset.
Statistics show that the average young married couple in the country spends 110 percent of their income — making up the difference with loans and credit from friends and family. With this approach to life and attitude, your ability to save, acquire, and accumulate wealth will be dissipated faster than you can imagine.
To ensure that you don’t go down that rabbit hole, below are some of the steps you can take to actively shift your money mindset from spending to saving:
The best way to kick any bad habits is to work on changing one behavior at a time. The beginning of the year, especially, presents an opportunity to make these changes because this is right around the time most of us revisit how we budget our money (usually because our credit card bills in January show how shockingly expensive the holiday season is).
Perhaps you have already decided to start saving more: You’re taking lunch to work, brewing your coffee, and stopping ordering takeout.
The problem, however, is you risk running into austerity burnout.
To change your money mindset, you need to work on one habit first, kick that one, then move on to the next habit. That way, you build momentum with little wins.
For instance, you might want to stop spending every weekend going out with your friends. Opt for a home movie session and cut out the cost of 4-dollar drinks from your budget. That one change will add up.
Once that is out, focus on packing your lunch and coffee to save on the cost of eating and drinking while at work.
Keep this up until your excessive spending stops and your saving game improves.
Spot Spending Triggers
Understanding yourself and the triggers that lead to spending also helps. For instance, the trigger could be an empty fridge, which causes you to order takeout. Alternatively, it could be a bad work week, which triggers a desire to go shopping.
Know yourself and understand your environment. For instance, if there’s a coffee shop on your way to work, the smell of coffee brewing could trigger an automatic response to buy coffee. By understanding what causes you to spend, you will find a solution and form an action plan to avoid the triggers.
To stop the spending triggers from affecting you, replace them with positive habits. For instance, if you had a terrible week at work, the automatic response would be to shop it off. Why not opt for something cheaper? Go for coffee with a friend or invest in a good book.
The key here is to come up with a solution that effectively deals with the trigger while also improving your money mindset so you can save more than you spend.
Analyze Your Behaviors and Identify Your Tempters
There’s a reason you have a particular habit. If you buy cappuccinos every day, ask yourself why you prefer retail cappuccinos over what you could make at home or in the office. Similarly, if you often buy new clothes, ask yourself whether you’re giving into the allure of retail therapy.
Analyzing yourself will help you know why you spend your money on what you buy. This way, you can decide whether such spending is genuinely worth it. Over time, you will begin to understand your temptations.
And temptations are indeed everywhere. From subway ads on your way to work to the countless social media pages created by businesses to target you, it can be challenging to shift your money mentality from spending to saving.
So, how do you go around this? The solution would be to avoid temptations. If there are too many pages putting up tempting products for you to buy, unfollow them. Find ways to distract yourself from those temptations.
There’s a virtuous cycle here that rigorous budgeting enforces. Even if you become thrifty to a fault, just having your budgetary goals at the front of your mind will help block out those pesky temptations to spend.
Make Saving a Routine
Everyone has a set of routines that they follow day in, day out. An excellent way to change your money mentality would be to create a pattern that forces you to save. Therefore, start slipping saving habits — one at a time — into your routine. This way, you will have an easier time remembering and enforcing them until they become part and parcel of who you are.
Admittedly, savings routines are challenging to create. But starting now when you’re early in your career introduces benefits that multiply over time. If you talk to anyone a generation or two older than you, they will tell you one thing: “I wish I’d started saving earlier. I would be so much further ahead than I am today.”
Of course, hindsight is always easier than foresight. But be honest with yourself: Do you need that new car? Is eating lunch out much better than what you can pack for yourself?
This is the real secret behind a savings mindset. Whereas most people take great pleasure in spending their money, savers don’t entirely operate in the same way. Instead, they feel uncomfortable when they shop and get emotional whenever they have to pay for something that isn’t necessary.
With this change in place, you can set your eyes on further horizons. When a $20 meal in a restaurant turns into an $8 meal you’ve cooked at home, you now have $12 to put into your savings or investment account. Added and compounded, all these small savings will accumulate and help you build wealth while others around you continue to struggle to pay off their debts, take care of their families and meet their responsibilities.
But what about bigger savings and what to do with them? You can work with wealth management experts like Monty Cerf to receive advice and guidance for larger sums, especially after an inheritance or even striking lucky onna scratch card. Sometimes, having too much money can be overwhelming for the average person, so keeping an expert close by can be a huge help and make everything easier to manage.
The earlier you learn to change your money mentality from spending to saving, the easier it will be for you to go from an obsessive spender living from paycheck to paycheck to an intelligent saver who can find money to do extraordinary things like traveling the world and buying a cash home.
Does this sound like something you can do? Then, get started today! Your future self will thank you in ways you can never imagine.