Have you heard of the term SPAVINGS?
One of my 2020 Financial Goals is to do spavings and record it. I had my first ever spavings update last time when I did my January 2020 Net Worth Update.
And boy was I happy and giggling inside.
Finally, I am really experiencing the benefits of spavings.
It has only been one month since I tried spavings but I am really enjoying it. So today, I thought I would share this new financial term (and a financial hack at the same time) to you all.
What is Spavings
Spavings is the perceived savings you get when you buy something on sale. The term is actually a play on words Spend and Save.
I first heard about the term in Budgets are Sexy blog but was originated really by The Lady in the Black.
So what is it really?
Remember those moments when you buy something on sale. Where did you put the extra money you saved?
If you just added it to your spending money you actually did not save at all.
With spavings, you are encouraged to deliberately put that money saved as part of your savings.
A lot of times you encounter people who say they saved this amount of money for a 20% off deal, when in reality what they did was only to spend money because savings only accounts to money we actually SAVED.
My January 2020 Spavings amounted to Php 1360. I was at my usual Friday stroll after work in National Bookstores only to find myself in a number of books for 80% off! I got four books that are on my reading wishlists.
The total money I spent was just Php 340.
Without knowing the idea of Spavings, I just spent Php 340 on books. But, because of Spavings I immediately transferred the Php1360 as part of my sinking fund.
Here is/are new spaving/s opportunity I encountered so far:
- Php 80 – I used my Starbucks coupon on Php 100 only for a tall cold brew.
Why try Spavings
Spavings is not only a saving hack.
It will actually teach you valuable money lessons more than that.
Doing spavings will help you become more conscious of how you spend your money.
Because you know discounts don't count as savings unless you actually save, you will think twice before buying something. You become more cautious with the deals not unless you are ready to save the difference.
Spavings is also an easier saving challenge to do because you are not depriving yourself from actually spending on something.
There’s just one golden rule, you need to save whatever discounts you make.
How to do Spavings for Beginners
Saving money is one of the foundations of all financial success.
Dave Ramsey even said once, “Earning a lot of money is not the key to prosperity. How you handle it is.”
It’s really more of how we manage our money that makes the difference.
Spaving is one way you can actually save money without putting too much effort. It’s just changing your mindset from when you get a discount, you already saved money to actually saving money.
More or less when we get discounts, we just stop by buying. You may have spent less but when you check your budget or track your expenses, you didn’t actually save anything.
This is where spavings take place.
In spavings, you are encouraged to deliberately put that money saved as part of your savings. So how do you do spavings for beginners?
1. Commit to it
This is the first and the most important step when it comes to doing the spavings. You need to commit to it. Get clear with what you want to do after doing the challenge. Where will you spend the money? Will you add it on your first investment? Are you saving up for a new bag? New shoes? Just write it down and phase yourself in committing to it.
2. Track spavings
Tracking your spavings is the hardest part of this whole spaving challenge. You want to make sure every discount you get is tracked well so you can easily transfer the money as part of your savings. Another way you can do spavings is to simply track all the discounts you get throughout the month and deposit the equivalent into your dedicated savings account.
Where to Save Your Spavings
This depends on what you are saving up for on the money you gather from spavings.
If you are to do it for just a year, a savings account will be a better choice. And if you can track it religiously, you can simply park it on any of your current accounts.
You can also add it to your investments. If you are investing in a mutual fund, the additional investment is just Php 1000. As long as you hit that number you can transfer the money to your investments.
3 Things To Do with Your Spavings Money
You can use your spavings money to almost any short-term goals you may have. Here are some examples:
Emergency Fund – If you are finding it hard to save up for an emergency fund then why not use this method instead. Every savings you get from discounted items you bought, no matter how small or big they may be, has value. You can automatically add them to your fund dedicated for emergency situations.
Sinking Fund – Are you saving up for a concert that is about to happen in six months? Have a quarterly bill to pay? Use your spavings to fill in those sinking funds faster.
“Wants” Fund – You can also use your spavings to buy that item you’ve always wanted whether it be new shoes or clothes. Before you commit to the spavings hack, have a list of items you’ve always wanted to buy but can’t seem to justify the reason why. Then, as you hit the target amount thanks to the money you spaved, buy them.
Final Notes from SavingsPinay
Spavings, unlike any regular saving hacks take commitment and accountability. To know more about the progress of my own spavings – check out my net worth update every month. Here’s for January 2020.