How to Truly Save Money in 2023: What No One Tells You

Saving money may not be easy, but there are psychological tricks that can help us understand why we overspend in the first place. No one teaches you how to save or manage your finances properly. Despite several U.S. states working on incorporating financial education into classrooms, it is a subject that many of the Millennial and Gen Z generations have pending. So, how can we truly save money? What rules should we apply? Science has an answer.

Commit to Saving with a Prior Plan

Waiting for money to fall from the sky never helped anyone. We all want to win the lottery, but while that happens, commit to saving in advance. If you want to have $5,000 in six months for a trip or something special, review your income and execute actions to save it in advance. You can ask your bank to send an amount to your savings account automatically each time you receive your salary or use rounding apps like Acorns or goal apps like Oportun.

Trick Your Mind into Saving

Behavioral scientist Wendy De La Rosa explains that there is a way we can help ourselves save $100, $1,000, or $10,000. Instead of trying to save when a cycle begins—like when a new year starts or it’s your birthday—do it beforehand, thinking that your plan should be ready for that special day. According to De La Rosa, this will help these goals stick over time.

Manage Your Expenses Following This Formula

When we want to save, we always think about starting by cutting the biggest expenses, which are often the most important. This ends up making us fail in many cases because they require a more excessive effort. It is easier to start by cutting frequent, smaller, and less important purchases. For example, take a look at your bank statement, and you will likely discover that you can cut back on meals at restaurants, Starbucks coffees, and other small purchases that end up adding up to a lot of money at the end of the month.

Evaluate the Opportunity Cost

If you want to save money, you should think about something called opportunity cost. For example, if you are going to buy a new shirt that is on promotion with 50% off its price, we could say it is an excellent opportunity. Of course, the question always remains: Is that shirt really discounted, or is it a marketing trick? If you are certain, meaning that in another store it really costs double, then it is an opportunity. Because at any other time, it would cost you double.

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