The 10 Minute Finance Fix series focuses on topics you can learn in ten minutes or less to help improve your personal finances. In this 10 Minute Finance Fix, you will learn how to build your savings account.
Many people don’t know how to save money for large purchases because they lack the proper motivation. In this personal finance tutorial, you will learn how reminders and visualization can help you build a savings account. You will learn to avoid unnecessary spending so you free up cash to save. We’ll look at four ways you can build your savings account.
1. Find a picture online of what you’re saving for.
Search for a picture of the item you’re saving for – whether it’s a piece of furniture or a new car, a picture will help set the dream so you can be motivated to save money for it.
For me, I found two pictures: one of a house that I really liked (saving for a down payment) and a picture of my toddler son (reducing debt and saving for college). For you, it could be anything, but having a picture of it will help you understand why you’re saving money and can also help your husband or wife understand what you’re doing by sacrificing the little things so you can save money for your dream item.
2. Figure out how much it will cost (approximately).
You need to understand how much money you need to save. You can find good cost approximations for just about anything on the Internet. Remember to factor in shipping, taxes, and other fees in your approximate cost.
I estimated the cost of a down payment and also the cost of about a third of a college education in about eighteen years. The numbers were quite large, but not so large that they felt unapproachable. When you figure how much the item costs, calculate how much you need to save each month.
3. Print out a few copies of that picture with the cost as a caption.
I printed out five copies of each one. I actually put the numbers in bold on each picture near the bottom. Printing out the picture with the caption will help remind you of the item you’re saving up money to purchase.
4. Place that printout several places you will see it.
I keep one or the other wrapped around my credit card in my wallet so that any time I plan to whip out plastic, I see my son’s face or the home I’d like to have and I rethink the purchase. I keep them in other places, too: on the dashboard in my truck and so forth. Keep a picture wherever you need to have a reminder before you make a purchase which will cost you the item you’re saving for.
These four reminders were very easy to make and help keep me on pace for saving money. Seeing an image of the item you’re saving for will provide you the motivation you need to save money.