If you find savings plans impossible to stick to, you haven’t tried trickle method saving. It will work for even the least engaged saver.
For some, saving is easier than others, so it’s about finding the balance in your life that works for you.
Some people are comfortable saving huge chunks of their pay and living frugally, some will save a smaller portion and still have enough to eat out each week, while others will save for ages and then blow it all on a fun night out or a spontaneous purchase.
However you go, you’re on the right track because the behaviour of trying to save is present. Obviously, the third example isn’t desirable, but at least an effort was made to put money away. The worst thing you can do is sit back and hope that one day that money tree will grow, and in the meantime, you spend all you earn.
Instead, give trickle method saving a go and see if it works for you.
What’s trickle method saving?
If you’re not comfortable with splitting your pay specifically, or just can’t be bothered, then trickle method saving is your best bet.
The only thing it requires is a separate bank account and and an automatic transfer set up.
Find a high-interest bank account. Often online banks offer the best rates, such as ING. As you won’t be touching this account often, you want your money to be working for you while it sits there.
Now for the ‘trickle’.
Set up an automatic transfer into this new account that happens as soon as you’re paid. Choose an amount to transfer across, then set and forget. That’s all you need to do to put trickle method saving to work.
How much to trickle
The best way to determine what amount to trickle through is to set a goal.
Let’s say you want to save $2500 by the end of the year. Set your transfer for $50 a week and BANG, by the end of the year you’ll have your money.
Just remember, don’t touch the account. In fact, if you’re notoriously bad at saving, put a block on withdrawals on the account until you’ve reached your goal.
You can also set your Trickle Method saving account so that when you save $500, you automatically invest that $500 and start again. This is a lot more achievable in the short term, and a lot more fun as you’ll be reaching your goals faster and investing more often!
Remember: the goal is to put something away every pay. Even $10. That is still better than nothing. Trickle method saving doesn’t have to be huge but it should be something.
Other ways to trickle
You can also trickle your money straight into investing using these methods:
Raiz automatically invests your spare change. You link up your cards, and it will round up your purchases to the nearest dollar, and invest that into the sharemarket. You get to choose your portfolio risk – from conservative to high risk – and it gives you a great idea of what portfolios look like.
- For example: you spend $3.50 on a coffee, paying with your card. Raiz will round it to $4, putting 50c it into the stock market. It doesn’t seem like a lot, but the idea is patience. Every cent counts. Before you know it you’ll have hundreds in there.
- You can withdraw whenever you like. To make it worth the monthly fee, however, it is best you add additional money to the account. It’s super easy to do that through the app. Use the Trickle Method saving technique to do this too by telling the app to take out $10 a week from your account on top of the round-ups. It’s a very easy way of investing, hassle free!
Stake allows you to invest small amounts into the US stock market. You can invest in Apple and Google, Amazon and all the big brands, very easily and without spending hundreds, or thousands. If you have a spare $100 then Stake can help you put it to good use.
It’s worth the bother
So there you have it. As we mentioned before, it’s about what works best for you.
Don’t compare yourself to others, don’t think that it is going to happen overnight. You need to be patient and disciplined and give yourself a break. If you save and save and then happen to spend a bit on something worthwhile, then so be it!
Just stay in the habit of slowly trickling your money away and then when you reach your goal INVEST IT!
Buy some shares, put it in Raiz, or Stake, or an Exchange Traded Fund. Before you know it, what you once thought to be impossible, becomes very possible. And then the best thing is… you actually start to love it.
This is an edited version of a post that originally appeared on Equity Mates. It is republished here with permission.