Religiously putting money away into a savings account isn’t easy to do, and goes against a lot of our natural instincts. But it’s so much harder when you have to worry about running your household as well. How can you regularly put money aside while maintaining order in your home?
1. Have a family goal
Saving can be a team sport. Well, it’s certainly not a spectator sport! Money won’t magically appear in your account, nor will your credit card debt decrease unless you actively do something about it. But it maybe overwhelming to try and save up all on your own, while the rest of the family carries on as per usual.
It can be easier to save up when others are making the journey with you, whether they’re helping you to decrease costs or are putting aside money of their own. An easy way to get the whole family on board is to decide on a goal that everyone wants to achieve — perhaps saving up for a holiday?
While parents can put away some of their weekly earnings towards this goal, kids can help by saving their pocket money for spending cash, and everyone can chip in by reducing costs where practical. A savings account calculator could help you keep track of it all.
2. Sacrifice in some areas
This is the hard part. While you can usually find some way to put aside a bit of money every now and then, the real kicker is reducing costs. Most of the time you can do this quite simply — changing brands, shopping at a cheaper super market or taking a drive to the butcher or veggie shop to save more on those items. But there are some areas in which you shouldn’t scrimp.
Going to a bad hairdresser or barber is not a good way to save money, for example. The main reason is that you won’t feel good about yourself for the next 4-6 weeks until your next haircut. And if you don’t feel good about your money-saving tactics, it can be easy to feel dejected by the whole exercise.
Rather, spend money where it is necessary, but stop and think about the little things that can save you money.
3. Stop and think
How long is your goal’s timeframe? A few years, five maybe? If you’re aiming long-term, you should adjust your savings strategy. Putting money in a savings account is great, but if the interest charged on your credit card or car loan is 10 per cent higher than what you can earn through the bank, killing these debts might work out better in the long run.
To get the family on board with paying off the car, try creating a chart that tracks progress — one with the standard payments, and one that you fill out as you go. Display it in a prominent place that the whole family can see and update it every time a payment is made. You’ll be surprised how much support you can rally when there is a visual goal for everyone to work towards. Especially one that has an element of competition to it.
While charts and stickers are great for younger kids, teens need something a bit more age appropriate. How about holding a competition at home for who can save the most every week? The winner could receive a small donation towards their savings, or could dictate the Friday family meal — within reason, of course.
Making saving a more fun task is an easy way to instil this valuable life skill in your children, while providing a real life issue over which the family can bond, strategise and banter.