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Ask the Expert: How Do I Get Serious About Saving Money?

posted: 06/02/16
by: Ashley Lauretta
Savings piggy bank
iStock

Recently, the American Psychological Association found that money is the leading cause of stress in our country. Whether you are trying to save it, budget it, invest it or spend it, money management can be difficult.

"If you weren't taught early on how to save and view it as a natural part of life, it takes some time to get the hang of it," explains Patrice Washington, a personal finance coach, Money Maven on the Steve Harvey Morning Show and founder of Real Money Answers. "Because of this, the first thing you need to do is examine what limiting beliefs you might have around saving money."

Washington says that often people want to start a savings jar or have a hiding place for money in the home, but jumping to action won't help in this situation. When looking at what you know about your financial beliefs, she suggests a few questions to ask yourself:

  1. Were you taught that it's better to give than receive and therefore give every dime away even when you technically need it?
  2. Did you grow up seeing your parents put wants before needs and demonstrate to you that as long as you had enough to get by you'd be fine?

"Your beliefs determine your behaviors," Washington continues. "Before you can jump into picking out which savings strategy will work for you, you have to get to the root of why you haven't been doing what you know you should do logically."

Once you've determined why you handle money the way that you do, it is time to set goals for yourself when it comes to saving. Washington shares that you need to be clear and set an exact dollar amount. For an even greater chance of success, attach a visual with it.

"I teach my clients to start opportunity funds rather than emergency funds," she adds. "Saving for rainy days hasn't proven to be that motivating for most, but saving for something you really want and then keeping that image in front of you seems to be much more effective."

For example, Washington references a past client who wanted to move to Paris. To remind herself of that goal, she taped a picture of the Eiffel Tower to her debit card. That constant reminder whenever she went to spend kept her focused and she was able to save enough in 18 months (after 'trying' to save for 5 years).

Sorting out your beliefs, setting a goal and then putting a plan in place to keep that number in front of you is the key to success when it comes to saving.