You might start to think that it is a bad thing when you are saving money at a slow pace but you might be surprised with the benefits this has. It is unorthodox to do it on purpose because the idea is to save as much as you can in as little time as possible so you have enough time to enjoy the fruits of your labor. However, this may not always be the case for all consumers.
There might be times when you cannot save as much as you would want because of the personal issues you have to deal with. You could be going through a divorce and all your energy is focused on trying to end the marriage as amicably as possible. It is also possible that you are at the early stages of putting up your business which demands not only time but funding as well.
Saving money at a slow pace may not always be ideal but there will be times when it is the only option you have left. This is better than not saving at all but even in the midst of this situation, you might be surprised that it can open your eyes to countless benefits it can give you. You just need to keep an open mind to understand some of the concepts it can teach you.
If you find yourself in this situation, here are a few things you might encounter which can make the journey a lot more fruitful. Keep these benefits in mind so you can come out a little bit wiser in managing your finances.
It does not disrupt your budget
If you are saving money at a slow pace, there is a good chance that it does not take out a big chunk of your funds every month. That being the case, you can focus on other priorities you might have when it comes to managing your budget. Bear in mind that apart from saving money, you will have a ton of financial obligations you have to juggle simultaneously every month.
These obligations can be in the form of your house payments, car payments, or even making sure that you pay your student loans every month. These are just some of the payments you have to make every month and they take a lot out of your income. If you are saving a small amount every month, it helps you focus on your payments while allowing you to stay on course with your savings.
As you pay your mortgage loan, which is usually the biggest financial obligation you have, setting aside money for your reserve fund will not be that significant that it takes away from your house payment. You get to attend to both financial goals without having to sacrifice one for the other which keeps you on track.
It builds habit
If you find yourself saving money at a slow pace, it becomes a lot easier to attend to it since it does not take away too much from your income. You assign only a small amount every month and you get to do it month after month because it is not a lot. It is still a significant amount but it is nowhere near the amounts you have to pay your mortgage or even your can lender.
As you do this, one thing you develop as you become consistent with your payments is the habit of saving money. This is important because CNBC shares that almost 21% of Americans do not save for long or short-term goals. You keep at it and the next thing you know, you are already doing it without thinking twice about the act. Saving money by setting aside a certain amount every month becomes an automatic action for you which you do without putting much thought into it.
The idea behind this is that if you create a habit out of saving money, you get to do it over the course of time regardless of the amount and even your present circumstances. Even if you are going through tough times, you will still find ways to save money since it has become a habit for you and it does not feel right if you do not get to do it.
An incremental increase is easier to make
Saving money at a slow pace and at a low amount gives you the unique chance to incrementally increase that goal over time. Since you are already starting out from a small number, it will not be that difficult to add on to that over time. It does not have to be big jumps in the amount because it might deter you from adding more and make it difficult for you to save money altogether.
One good thing about this is that if you also create a habit if an incremental increase in the amount that you save, you may not realize that you are already well on your way to reaching your goals. It may be for your emergency fund, retirement fund, or even for your children’s college expenses. If you continuously save and add a small amount every time, it will come out to a significant total in the end.
You can sustain saving for multiple funds simultaneously
If you are saving money at a slow pace and putting in small amounts, you get to start and move forward with multiple goals all at the same time. This way, you get to spread out your funds and start saving with more than just one account. While you are putting money away for your retirement, you are also setting money aside for other goals such as your emergency fund, and even money for post-graduate studies.
What you need to keep in mind
Now that you have an idea about the benefits of saving small and slow, you also need to keep in mind that this is not the final situation you want your finances to be in. This is a good start but it should not be your goal. Here are a few more things you need to be aware of when you are just starting to save money.
Understand your priority
If you are saving money at a slow pace, you need to have priorities, especially if you are saving for a lot of funds. This is important since you will have a lot on your plate and will be managing multiple funds. One thing that can help you identify priorities in your finances is your age. One idea is that the younger you are, the more you can focus on strengthening your finances with en emergency fund.
As you go along, you can shift that focus on to your retirement fund, making sure you have everything you need to enjoy your golden years. Remember that you never stopped saving for retirement it’s just that you focused on it more as you near retirement age. Gallup shares that non-retired Americans see their retirement age 66 years old.
Another factor to consider is your risk appetite and how you need to slow down as you age. This has a lot to do with investments as you save for the future. The older you get, the more you want to protect the money you invested as well as the returns you have. This means lowering down risk exposure and looking for safer investments.
Consistency is key
As mentioned earlier, habit is a good outcome from saving slow and small. It helps you build up that good money habit and you can do so with consistency. If you are consistent with the act of putting aside even a small amount every time for your savings, it will become automatic for you. Just make sure that you make small improvements as well over time with either the frequency or the amount so you can save a bigger amount in the end.
Do not forget to live in the moment
The time might come where you are too focused on saving money that it consumes all your thoughts and actions. You are too concerned about your future that you already forget to live in the moment. As you set your sights on the future, be sure that you get to enjoy your life at the moment as well. Pause if you have to with a break or two so you can refocus and enjoy life. Once you get back, continue on with your goal.
There are surprising benefits if you are saving money at a slow pace setting aside a small amount as well every month. You just have to look at it in a different light rather than looking down on it.