The Little Habits That Add Up
The last post in this series was about making big changes in your life to be able to start saving or meet long term goals. I shared that for me, the big changes included even moving towns because it meant a cheaper house, a better (and cheaper) school for my daughter, and less time wasted in the city. However, it is not always possible to make the big changes, and some times, you combine both the big and the small changes and this post is about the small ones.
In Kiswahili, we say “haba na haba hujaza kibaba” (little by little fills the jar) and this is true in life as it is in finances. Little bad habits often lead to financial ruin, and conversely, little good habits will ensure financial success. Sometimes, we also make changes because of something specific we want to accomplish. To be able to save for my holiday, I have started doing a few things:
Expense tracking
Previously, I did not track my expenses consistently. I would do it when I felt the need to review my budget, or when I realized I was not in control of my money and needed to figure out where it is going. I would track my expenses for a month or two, then stop. This time, because I know every cent will count towards my holiday savings, I resumed expense tracking using the You Need A Budget app. It wasn’t smooth from the first day. In July, I had a huge balance of unaccounted-for cash expenses. The software showed that I had Kshs 30,000 more cash than I actually had. Two months down the line, I have mastered the habit of recording my daily expenses before I sleep. Looking at my budget analytics every month has become so much fun, this habit will definitely stick, even after the holiday.
Reducing on luxury purchases
My budget currently allows for a bit of luxury, because as someone said, “everyone needs a little luxury every day”. However, for this period, I have redirected luxury funds into my holiday fund. It is a short term sacrifice until I meet my goals, then I can resume. I do not advise cutting all luxuries as a long-term measure. It goes against two things I believe about money:
- Money is for your enjoyment, and being financially prudent means saving and investing, but also spending some.
- Just like dieting often leads to binge eating, cutting out all life’s luxuries can lead to impulse spending.
Finally, automation
When I realised I needed to save Kshs 11,000 every month to meet my target, I set a standing order from my current account to a savings account for Kshs 11,000 debited on the 5th of every month. This is because I knew it would be hard to sustain the willpower needed to physically transfer that money every month, especially during months with other pressing expenses, such as school fees. 🙂
This has worked great so far, and I would highly recommend it as a habit both for regular and one-off savings projects.
Over to you, what are your little savings habits? What hurdles have you faced trying to save for a major project? Let us discuss on Twitter, and on the comments section below.
This article is the third in a series of sponsored posts for the Barclays Savings Challenge. You can follow the discussion on Twitter and Facebook and share your own experience by using the hashtag #AfricaSaves. Visit the Barclays website for more information about their savings account.
