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Figuring out how much you should save a month and the best method for you to save money can be a tricky business. There isn't a one-size-fits-all method that will work for everyone. Several common methods are available to follow, so it can be overwhelming to determine the best place to start. But, if you find yourself overspending, consistently going over budget or not saving as much money as you'd like due to impulse purchases, you may want to consider giving the 30-day savings rule for saving money a try.
What Is the 30 Day Savings Rule?
To determine whether this method is right for you, it's important to understand exactly what it is. The concept of the rule is simple: If you find yourself wanting to make an impulse purchase, you, instead, place that amount of money into your savings account and wait a 30-day period. If you still want to make that purchase at the end of the 30 days, you can go ahead and do so. But, if you end up deciding that purchase is not needed, now you have that money stashed away in your savings!
Every day it seems like advertisements plague us, whether in person, on television, or our smartphones, sometimes in extremely subtle ways. A 2021 poll facilitated by OnePoll showed that the average American makes 12 impulse purchases totaling about $276 each month; that is over $3,000 per year spent on impulse buys that individuals may not need instead of putting that money away toward future goals. The goal of the 30-day savings rule is to help mitigate some of those purchases, grow your savings, and help create healthier, long-term financial habits.
How to Use the 30 Day Savings Rule
Identify Wants vs. Needs
The first step in implementing this rule is figuring out what your needs and wants are. Needs typically fall under the categories of living expenses (rent, groceries, insurance, utilities, etc.), items that will affect your health (prescriptions, health insurance, medical appointments, etc.), and things necessary for employment. Alternatively, wants are the items you can live without, and they will ultimately not affect your livelihood (morning coffee, eating out, excessive clothing purchases, etc.).
Take a look at the monthly purchases you've made and determine which category each one falls under. Once you've identified your usual purchases and what they qualify as, it will be easier to determine what type of purchase you're making during the 30 days. Is it a need, or is it impulsive?
Have a Dedicated Savings Account
You'll need a place to put your funds, so you must open up a savings account if you don't already have one. Oftentimes a savings account is included in a checking account opening, meaning you may already have one! Check with your financial institution to see if there is already one under your account if you're unsure of your options for opening up a new one.
The benefit of using a savings account connected to your checking account is that you can easily transfer funds over when you feel the itch for an impulse buy. However, this is also the downfall; if it's easy to transfer from your checking to your savings, it's also easy to transfer funds back.
If you feel like this may be an issue, and you would be too tempted to transfer it back to make an impulse buy, set up another blockade for yourself by opening up a dedicated savings account at a different bank that offers electronic transfers from bank to bank. That way, it takes several steps to get the funds back to your checking!
Create a Fun Budget
Just because you're trying to increase your savings for a 30-day period, it doesn't mean you need to cut out fun altogether. Set up a designated fun budget based on some of your wants. It's important, however, to stick to this budget each month and not impulsively go over. This way, you can still enjoy activities and save without restricting yourself too much.
For example, the Monorail app has a dedicated spot just for your Wishlist Fund. Add all the items you’d love to buy, prioritize, and add money to your Wishlist Fund. This way you have a dedicated spending account to make sure you’re really buying those items that will add value to your life.
Record Impulse Purchases in One Place
Pick a spot and record all of your almost-impulse buys there. It could be your Notes app, a post-it note, or a list on your fridge. It doesn't matter which method you choose; the important part is that there is one destination where you can find them all. There are a few benefits to this; first, you'll be able to establish good habits and figure out what you typically want to impulse buy. Next, you won't need to look through your search history to determine what you wanted to buy on that one day a few weeks ago. Lastly, it'll help you identify what items are essential to you from that list.
And maybe you record those things in your Monorail Wishlist. This could be a great way to visualize what items are most attractive to you.
Reduce Your Screen Time
Advertisements are all over the place, whether it's on the big screen, the silver screen, or the screen in the palm of your hand. Constantly being bombarded with product placements can increase impulse buying and deter you from savings goals.
Try to spend less time potentially exposed to those temptations by putting the screen away and enjoying other hobbies. If you want to go one step further, consider deleting social media altogether for a specified amount of time, which may be beneficial in more ways than just financial!
Saving Money with the 30 Day Rule
Typically, we don't see the effects of our impulse purchasing right away. But in reality, there are better ways to use those funds toward your financial future. By implementing this method, you may surprise yourself with how much money you can save and what healthy habits you can create.
And it’s possible that Monorail is the right app to help you get started on your savings journey.
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