Getting Out of the Yo-Yo Habit of Saving
Saving for that special occasion is never quite as simple as it sounds. Although many of us would consider ourselves to be careful and considered savers, this is not always the case and many of us develop bad saving habits at times.
Of course, if we see a dress in the sale or a reduced ticket for a concert that we *must* attend, then it’s just too simple to splurge and not save. The secret is to budget in a way that makes you consider the impact of splurging. Here’s how.
Getting Out of the Habit of “Yo-Yo Saving”
Several surveys point to the fact that many people save in a similar way to the way in which they diet. The so called, “yo-yo effect” means that although your intentions to save are true for the majority of the time, but one bad day of splurging or a quick spending binge can suddenly seem incredibly satisfying for the saver. In actual fact, it is ruining a great deal of their hard work.
If you’re this type of saver then although it may seem discouraging, it’s important that you look to the positives. This method of saving should help you prove to yourself that you can actually be a frugal saver for the majority of the time and, because of this, all you have to do is adjust your mental attitude to help you during the times where you’re tempted to splurge.
How Do We Get Out of the Habit?
Getting out of the Yo-Yo habit of saving is simpler than you’d first imagine, and is purely a question of altering your willpower. Everyone’s mind works in a different way, and it’s about knowing what suits your brain best. One helpful tip is to keep a savings book that monitors your progress.
As part of this, whenever you add to your savings account, you can total up the sum, noting next to it what you can afford. You should always be saving for something specific – use my tips for saving to decide what you want and to determine what you REALLY want.
For instance, if you have £1,000 saved, then you know that you can buy that a 60” smart TV that you identified 3 months ago that you really want! However, these need to be things that you truly want and if you have saved for them correctly, then treat yourself!
This sort of perspective really opens your eyes, helping you see your rewards and showing you how much of an impact that new dress would really cause. After the splurge on the £100 dress, you are now 10% away from where you need to be to get that thing that you truly long for.
What About Big Projects?
Of course, if you have something big to pay for, such as needing a new boiler or repairing a car, then that’s an entirely different prospect. Here, “Yo-Yo saving” is unavoidable, and your savings account will have to suffer. After all, it is there for a rainy day.
For credit cards and loans, there are plenty of options are available, but you should be wary of all interest charges and fees to determine the overall costs in the long run.
For instance, Nemo Personal Finance have a calculator, to help you see the cost. Getting out of the habit of ‘yo-yo saving’ is easier than you’d think. Of course, for large scale issues, splurging is unavoidable, but if you just set up your little black book and get calculating- you may be surprised by the results.