Where does that $100 you saved by cutting back on that certain expense last month actually go? Unfortunately, it usually vanishes. Even though you might have saved $100 on groceries, for example, doesn’t mean you have $100 more in your bank account every month.
If you really want to learn how to save money every month, you need to take one extra step. You need to physically withdraw that money from your checking account. Not at the end of the month, but today.
For example, you just reviewed your expenses from last month and saw that you spent $125 on eating out. You’re trying to save up for a dream vacation, so you set a goal to not eat out at all for 30 days. You estimate that this will save you $100.
The next step is the most important step of all and the reason why most people don’t ever learn how to save money every month. Right now, as in the beginning of the month or as soon as you set the goal, you need to save that $100. There is no sense of waiting 30 days. You need to withdraw that money and set it aside to into a separate account, today. (Shameless plug for ING Direct, who lets you set up sub-savings accounts to make this process simple)
What Happens If You Choose To Wait
If you choose to wait until the end of the month, that $100 will vanish. Your brain will tell you that you saved $100 by not eating out, so now you a spend $100 on something else. Typically an impulse purchase because your subconscious is telling you that you have an extra $100 to spend this month.
How to Save Money Every Month
Next time you need to save a few dollars, save it today. Don’t wait till the end of the month.
Set your goal now and work towards it for the next 30 days. I promise, you will have the same amount of money in your checking account in 30 days, then you have right now. However, your savings account will grow.
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