How to Start Saving Part I
by Susannah McQuitty
You got this—all you have to do is start!
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Everyone tells you to stash some money for a rainy day. So, you did your research and got plenty of advice, but somehow you’re still just making it paycheck to paycheck. How do you actually start saving?
That’s where our Budget Bootcamp comes in.
We’ve broken down the process of getting to know your money habits and how to build new ones into a four-week plan. In Weeks 1 and 2, you’ll learn about your spending habits and how to build better ones. With those tools in hand, you’ll be ready to start saving money in Weeks 3 and 4.
Let’s get started!
Week 1: Don’t Change a Thing
Wait—don’t change?
You heard right. This first week is all about doing exactly what you’ve been doing, except this time, you’re going to keep track of it.
1. Record What You Buy
Keep every single receipt, and we mean every one: paper receipts, e-receipts, text receipts, you name it. If you’re not given one, ask for it. Yeah, it’s a little awkward, but it’ll be worth it.
If you buy something, make sure there’s a paper record of it in your wallet. If you get an electronic receipt, jot down what you bought and how much it cost on a sticky note and slide that in with the others.
Here’s the key: Don’t get rid of your receipts at the end of the day. Keep them in your wallet next to your cash the whole week. If they start to fade from heat (hello, summer), whip out those sticky notes again.
One way or another, you need a paper record in your wallet for everything you buy. It may sound weird, but trust us, there’s a reason.
2. Analyze Your Spending
At the end of the week, sort your receipts into three categories: Wants, Comforts, and Survival.
- Wants include anything you bought that wasn’t necessary. Drinks with the guys, a new shade of nail polish, that new video game you’ve been waiting for, and so on.
- Comforts are items that, while not necessary, make life a lot easier. You’re nodding off at work, so you hit up the coffee shop. You need a new pair of flats, because you’ve been wearing heels too often and your sandals are looking ragged. Comforts are somewhere between Wants and Survival.
- Survival expenses are things you can’t live without: gas, bills, groceries, and that run to Walmart for ibuprofen and antacids. Sometimes the line between Comforts and Survival can get blurred (I mean, coffee), but be honest with yourself. You don’t have to go full Bear Grylls, but it may be time to give up the local coffee shop runs and caffeinate with the office brew.
3. Get a Game Plan
Now, letʼs write a budget based on your spending habits.
- Add up all the money you spent this week on Wants and Comforts: that’s your new spending limit for Week 2. For example, let’s say you spent $150 on Wants and Comforts during Week 1. Next week, you get $150, and nothing more.
- Write down how much you want to spend on each. Shake it up and move money around. The goal here is to be intentional with your spending. If you want to move money from Wants to Comforts, you could cut out a trip to the movies and finally ditch that instant noodle casserole recipe you’ve been using since freshman year of college. Or, if you prefer, pack lunch one day instead of eating out and order that new book your friends have been raving about—just move a few bucks from Comforts to Wants.
Voila! Now you have your first budget. Week 2, here we come!
What’s the point?
One of the leading causes of “disappearing money syndrome” is how easy it is to spend without thinking. If you buy in the moment, you don’t consider what you’ve already bought or may need to purchase soon.
As you save receipts, those crinkly little slips remind you that you’ve already dropped a few bucks. Over the course of the week, they multiply and start taking the room that your cash left behind.
You’ll start to hate the sight of receipts, but that’s good! You’re becoming more aware of how much you spend, and that’s the first step toward saving big. And after sticking to your first budget, you’ll have a better grasp of your financial situation, which makes refining your spending plan much easier.
Coming up: Break Out the Budget
Next week, we’ll talk about spending on a budget, how to keep yourself from breaking away from the plan, and how budgeting actually frees you up to buy the stuff you love—without the guilt!
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