There are some things you just never, ever feel like doing. Visiting relatives you suspect secretly hate you over Chinese New Year is one of them. Waking up at 7am to go to work and see your boss’s black face could be another if you hate your job.
But saving money, however much you might wish wasn’t necessary, doesn’t have to be something that is so unpleasant that you queue up at Singapore Pools three times a week in hopes of winning your way out of your current financial situation.
In fact, cultivating the habit of saving and investing can become relatively painless. Here’s how to make it easier:
1. Know the goals you want to achieve with your savings
Remember how you absolutely hated drawing those bar diagrams in primary school? It seemed so pointless spending hours constructing them with your ruler and pencil when you could have just calculated the answer to the problem sums in your head and saved a ton of time.
Now that you’re an adult, you shouldn’t waste your time doing things that are pointless—so if you see no deeper meaning behind visiting that nasty auntie during Chinese New Year, by all means avoid it.
The same goes for saving money. In order to motivate yourself to save and invest, you should know exactly why you’re doing so.
Maybe you’re saving up for the downpayment on your first home so you can finally move out of your parents’ place.
Or, maybe, like most of us, you want to attain financial independence so you can finally retire and enjoy the rest of your cubicle-free life.
If these goals aren’t enough to motivate you, try to define them even more specifically. Saving up for a home? Do research online about property prices in your desired area and for your desired property type, and come up with an exact figure you wish to save up. If your goal is retirement, calculate at which age you want to retire and how much you’ll need.
The more specific your goals are, the more you can understand exactly how much that $1,000 you’re saving is contributing to your success.
2. Stash your cash savings in an account that can’t be accessed by ATM
It’s not a good idea to keep your long-term cash savings in the same account that you withdraw daily cash from. Do that and you’re relying 100% on discipline to prevent yourself from spending it.
It’s far more effective to keep the cash in a separate account, one you do not have an ATM card for.
An added benefit of opening a separate account is that you can often take advantage of more attractive interest rates.
For instance, the CIMB FastSaver account gives you 1% interest on your first $50,000. This is unlikely to be the account you want to use for your daily spending because you need to show up at one of their two branches to withdraw cash. Unless of course you want to travel all the way to Raffles Place to withdraw $6 for your McDonald’s meal.
3. Monitor your financial situation regularly
Remember what it was like to start a new school year? In the first week or two, you’d feel like you had everything under control, and you’d swear that this year would be different, you’d finally get your act together and start pulling up your grades.
But all it took was one undone homework assignment, three days that you spent playing DOTA all night instead of keeping up with your school work, and everything came undone. Things would start to spiral out of control, and before long you’d give up until exam time came around.
When it comes to your financial situation, it’s just as easy to lose control. It’s hard to come up with a savings and investment plan when you have no idea how much you spend each month.
That’s why it’s important to monitor your financial situation regularly. The more you know about how much you spend and save each month, the better you’ll be able to make rational money decisions.
One thing that really helps is to download an app that helps you track your expenses. You can break your expenses down into categories like food, shopping, entertainment, etc to help you see where your money is going each month. Once you are more aware of your spending patterns, you’ll be better able to see where you can cut back.
How do you motivate yourself to spend less? Share your tips in the comments!