The 5 Parts of the Money Saving Process

Money saving process

Magicians like Harry Houdini have been astounding audiences for years with their seemingly impossible feats of magic, misdirection and secrecy. Whether or not you believe that sawing someone in half and putting them back together is actually possible, we do know for a fact that nothing about your finances, especially saving money, is able to be cured by waving a wand or yelling “Abracadabra!”

Saving Money is a Process

There is more to saving money than throwing some cash in a savings account and calling it good. It takes time, thrives on consistency, requires balance and realism and has a psychological aspect to it as well. Let’s take a look at each of these areas of saving a little more in depth.

  1. The Psychological Aspect – Let’s say you want to save $3,000 for a down payment on a new vehicle. That’s no small amount of money for most people. One of the main reasons so many savings plans fail is that it seems like too daunting of a task. “How do I save money when I have other expenses to take care of?” The key is to not try and save everything at once, but work toward it inch by inch.
  2. The Time Aspect – Come to terms right now with the fact that saving money takes time. You’re not going to be able to stash away $500 at a time (unless you get a bonus or additional funds from somewhere else) because of your recurring expenses. Bit by bit, $25, $30 or $50 at a time is what it takes. Saving isn’t about instant gratification, it’s about doing things consistently so that one day, when you need it, you can look at your savings account and get your gratification.
  3. The Consistency Aspect – Saving money thrives on consistency. It can be as easy as automatically transferring a set amount from your checking account to your savings account every week. However you go about saving money, try to keep it as simple and automatic as possible.
  4. The Realism Aspect – Living a responsible life and saving what you can = good. Starving yourself and living desperately = bad. You need to be realistic about your saving, both in what your target is and how you’re going to get there. While you may not be able to eat steak every night, you need to make sure your necessities such as food, housing and health are taken care of.
  5. The Balance Aspect – As we’ve said, consistency in your savings is a good thing. But that doesn’t mean you can’t live a little and reward yourself responsibly. So, don’t be afraid to go a little outside of your budget once in a while. Just be sure it’s appropriate spending; taking your spouse or family for ice cream after a good day at work is fine, going out and purchasing a $500 smartphone when you have a year old model may not be. 

Whether you are saving in small amounts or can afford to stow away a little more cash, Putnam Bank can help. Visit your nearest Putnam Bank office today to find out how.

Putnam Bank, Equal Housing Lender, Member FDIC