In 2014, my husband and I managed to save $50,000 for a down payment on a house. Considering we had spent the previous four years of our marriage paying off $45,000 of debt, we considered hitting our savings goal a huge feat for us.
We continue to save around 20% of our take home pay and love watching our bank accounts grow. To us, having money in the bank gives us a sense of security. We don’t have to worry about not having enough money in case of a financial emergency, and we can pick and choose which house projects, vacations, and investments get our money.
If you want to get as serious about saving money as we did, here are some tips you can follow.
Pay Off Debt First
Without a doubt, the number one way to save a lot of money is to get rid of your debt first. When we got married, we had $45,000 in debt, and my husband was making minimum wage while I was making the median American salary.
We decided to get serious about our finances. We downsized from a one-bedroom apartment to a guesthouse studio in someone’s backyard, which saved us around $500 a month (we live in Southern California).
We made a lot of other sacrifices, including postponing our honeymoon for 2.5 years, only allowing ourselves one restaurant outing per month, and sticking to a strict budget so that we could get rid of our debt.
By the time our debt was paid off, we had contributed around $1,000 a month toward debt for 45 months.
Live Within Your Means
Once our debt was paid off, we could have gone on major shopping sprees with all this ‘additional’ money we had in our budget, but instead, we continued to live the same way and decided to contribute this money toward savings instead.
Every day, we choose to live within our means rather than trying to keep up with the Joneses. This means we drive cars that are 10 years old, we only take vacations if we can pay for them in cash, and we never spend more than what we have in the bank.Want to get serious about saving #money? Follow these 4 tips! Click To Tweet
Make a Savings Goal
Rather than just dumping money into a savings account, we decide on our goals and then save toward our goals. This helps us feel like we’re working toward something rather than just having money lying around for no reason.
It also helps in removing the feeling that we can just “dip into” this account whenever a non-emergency arises, like going on a last-minute vacation with friends, or buying a designer handbag that’s on sale.
Currently, we’re saving toward goals such as an emergency savings account, a Christmas gift fund, a new car fund, various house projects, and our annual family vacation.
Pay Yourself First
If you want to get serious about saving money, then you need to pay yourself first. Before I put money toward any expense (including our mortgage!), I put money into savings.
In fact, I direct deposit our savings into a separate bank account so that the money never hits our checking account. I don’t feel temptation to spend it, either. Out of sight, out of mind, right?
By deciding at the beginning of the month how much we can actually contribute to our savings goals, we eliminate getting to the end of the month and realizing that we have no money left to put toward savings. It is absolutely essential to pay yourself first if you want to get serious about saving money.
Have you gotten serious about saving money? What are you doing to put more money in your bank account?