No matter your situation, saving is important. When you save more money, you build a foundation that can help you reach your goals — and even help you break the cycle of generational poverty.
Unfortunately, saving can feel like a daunting task. I remember the days when I felt like I didn’t have even one penny to put toward saving.
Eventually, though, I realized that there are some simple steps that can help you save more money. And, in today’s world, there are a surprising number of tools that can make it easier. Here’s what you need to know:
1. Start Small
My big mistake was thinking that I had to have a certain amount of money already in order to start saving. I didn’t think it was “worth” it to save without a significant sum to sock away.
If you want to save more money, though, it’s less about the amount and more about the habit — and using that habit to reach your goals. When you start small, you can create a habit of saving.
Make your goals simple. Maybe set aside $1 a day. Or you could start with $5 a week. The key is to get into the mindset of saving. As you do this, the way you think about money changes. You start looking for ways to save even more.
When I started this process, I committed to $10 a week. After a couple of months, though, I realized that I could find more money to save. I trimmed some of the fat out of my budget and looked for ways to earn a little extra scratch. Pretty soon, I increased my savings t0 $15 a week, then to $20, then to $50.
It doesn’t matter how small you start — as long as you’re willing to set that money aside and then look for opportunities to increase your commitment.
2. Make it Automatic
Want to ensure you save more money? Make it automatic. You might be surprised at the amazing tools out there to help you save extra money.
Yes, there’s the auto transfer. I use an automatic transfer twice a month to move money into my travel fund. For my short-term emergency fund, I have an automatic transfer made once a month.
But it’s not just about the automatic transfer. I’ve used Digit in the past to automatically find and transfer money to savings. I also use “round ups” from Acorns to take my regular purchases and save a little extra from those transactions — and with Acorns, they’re invested.
Look for ways to save more money by making it automatic. When you can save without thinking, it’s your best option. Look for different tools that make it easier to save. From linked accounts or tools like Simple to automatic transfers and “found” money from different tools that redirect part of your purchases to savings, you might be surprised at how small change can add up.
My these small roundups and transfers a regular part of your financial planning, and you might be surprised to see the results.
3. Invest What You Can
On your quest to save more money, don’t forget to invest. One of the best ways to build wealth over time is to invest. After working toward building my savings, first starting small and making things automatic, I began investing.
Part of my money goes toward investing in retirement — in a tax-advantaged investment account — each month. I use Acorns to automatically round up my everyday purchases and invest that money. And I have other accounts, including a tax-advantaged health savings account and a taxable investment account, designed to help me save more money in the long run.
For the most part, I use index funds in my investment portfolio. These provide instant diversity, and they’re simple, keeping me from having to deal with the complexity of picking stocks.
While you don’t want to put all your financial eggs in one basket, it can be very helpful to include investing as part of your long-term strategy to build wealth. Once you get in the habit of saving more money, it makes sense to put at least some of that money to work on your behalf.
Bottom line: Don’t make it complex
It doesn’t have to be complicated to save more money. You can improve your financial situation by taking a few simple steps to build your wealth. Start small, make it automatic, and invest in index funds.
Later, as your mindset changes and as you have success, you can start picking stocks, evaluating them based on value, or you can employ more advanced tactics to help you save more money and grow your wealth. But, for now, keep it simple and just get started.