Saving – how to not dip into your savings account
Do you find yourself getting paid, putting money into your savings, only to get to the end of the month to pull some of it back out again?
Don’t worry you are not alone – according to money.co.uk in the UK, 34% of adults had either no savings or less than £1000, in a savings account.
Research shows the struggle we have, specifically people aged 18-24, when it comes to growing savings and in this article, we are going to break down 4 top tips to help you stop dipping into your savings and actually start growing your money.
Get really clear about your WHY for saving
Creating financial goals is helpful not only to determine how much you should be saving every month to reach your goal but also on an emotional level.
The clearer you are and the more emotionally motivated you feel towards your goals, the less likely you are to dip into your savings. Every time you go to dip into your savings, take a moment to reconnect with the exciting vision of reaching your goal. Ask yourself “Is spending this money right now, more important than the exciting goal I am working towards?”
Sometimes the answer is yes and that is okay. Tap into the emotional side of your goal and become conscious of your intention for that money.
Improve your money mindset
There could be a range of reasons you struggle to hold onto money such as if you believe money makes you greedy or selfish, then you will subconsciously self-sabotage your financial progress and spend your savings to ensure you don’t become a ‘greedy selfish rich person’. Or if you have some unhealed wounds from your childhood, you might feel undeserving of having money and therefore your behaviours will reflect this.
The way we handle money is a direct reflection of how our money beliefs and how we feel about ourselves. Digging deep and exploring how worthy you feel of having and holding onto money is so important. Journaling is an incredible way to start to understand your current money beliefs and mindset!
Put friction between you and your savings
Don’t make it so easy for yourself to transfer money out of your savings and into your current account. Instead, automate your finances to move money automatically on payday into your savings and lock it away into a savings account that you have little or no access to.
Some providers offer saving accounts with cool functionality that reduce your access to your money (for example the Zopa Smart saver account) or avoid downloading the app onto your phone to put obstacles between you and transferring money out of the account.
Reassess your budget
Are you putting too much money into your savings? Sometimes it is a purely practical reason that you are trying to save too much.
It can be easy to think “this month I will save 70% of my pay and not go out at all”, but this attitude can set us up for failure. As amazing as it would be to always save a crazy high portion of our pay, we have to be honest with what we can afford. Create a realistic budget and leave yourself with enough spending money for the month so you are less likely you will dip into your savings.
And remember, every time you dip into your savings you are stealing from your future self.