Begin by acknowledging the progress you've already made
According to Bedda D’Angelo, a certified financial planner who works for Fiduciary Solutions in Durham, North Carolina, many of her clients begin the process towards building wealth with no idea of the progress they’ve already made. When asked to submit a list of their personal assets during consultation interviews, most people forget to include their 401(K) or the property value of their homes. They do this, D’Angelo explains, because they are focused on what they don’t have rather than what they already have. To develop an abundance mentality that motivates savings, it is important to begin the process of building big savings by noting the accomplishments already achieved.
Carry big dollar bills to help think big
Help facilitate your mental shift from “lackâ€ï¿½ to “savingsâ€ï¿½ by carrying around a fifty or one-hundred dollar bill in your wallet. Keep it secure behind the more common denominations. D’Angelo insists this mind trick helps consumers shift to thinking “bigâ€ï¿½ when it comes to money. As the lower denominations get spent, advises D’Angelo, stop and tell yourself, “I’m down to my last hundred,â€ï¿½ before breaking the bill.
Automatically divert money into your savings
Savings has to start somewhere. Many consumers feel that they need to pay off their student loans, credit card debt, or reach a magic point in their mortgage before they can save. The problem is “somedayâ€ï¿½ never really comes. Start saving now, irrespective of your debt, by automatically placing a small portion of each paycheck in your 401(K) retirement plan, a 529 tuition plan if you have children, or even a simple passbook savings account. The point isâ€"start somewhere, start habit forming, and start now.
Get acquainted with a discount brokerage firm
One of D’Angelo’s more radical instructions to clients is to open an account at a discount brokerage firm. After you have successfully saved your first grand, place that $1000 in a money market standard mutual fund. Savings strategies such as these are preferable to standard savings accounts because while funds are available in an emergency, the money is not as accessible for the perennial impulse buy. Every time you save $1000 in your savings or checking account, move it into a tax-free mutual money market fund.
Focus by saving for a specific dream
Finally, D’Angleo asks her clients to save for something big and something specific. Many of her clients focus on buying their first home or their dream home. By intentionally saving for something momentous, the process of saving as a “lifestyleâ€ï¿½ become tangible, meaningful, andâ€"once you’ve saved your money and are ready to buyâ€"incredibly exciting! The important thing to remember, say D’Angelo, is that these things take time. Savings can be achieved if you’re motivated and take it step by step.
