Making smart financial decisions after landing you first job is half the battle. Sure, you've got your budget, your financial goals for the future, maybe you even reassessed what your credit card is doing for you.
But, unfortunately, having the playbook and making a plan is not enough. When it comes to budgeting and savings – the pillars of strong personal finance – the key is staying on top of your plan and forming good habits, that hopefully, become second nature.
The second post in a series on helping millennials manage their money right out of the gate, today we are focusing on mental tactics to help with saving. The previous post focused on how to avoid money mistakes after landing the illusive first job and Monday's post will talk about planning for retirement.
Forbes caught up with three experts on psychological tactics that help build personal finance habits like saving money. A strong bank account isn't just built on a spreadsheet.
All the experts agree, even if the idea of saving seems insane given your current paycheck, the key is to start small. The habit is more important than the actual dollar amount going into your retirement or savings account.
"With your foot in the door, it becomes a lot easier to ramp that up over time and really make a big difference," says JJ Montanaro, a certified financial planner at USAA.
Split your Raise
If you have started out with a small contribution to your savings, think about splitting your next raise between savings and your expenditures.
"When you get a six percent raise for instance you might then increase your savings from three to six percent of your salary. It doesn’t hurt that much that way and that kind of positive momentum is what you need in order to start saving early and effectively." Luke Delorme, Research Fellow at the American Institute for Economic Research.
This can make a small contribution amount slowly, and painlessly, bump up over years.
Set Goals and Celebrate
Sometimes the world of savings can seem overwhelming, especially when you are looking ten or twenty years down the line. Set realistic savings goals that can be broken into shorter time increments so there is still a sense of accomplishment as you move forward.
"People who have a plan with goals and objectives tend to do better because they stay grounded in tough times and have motivation. They are going towards way points," says Montanaro, who adds, that it is important to make sure goals are realistic, as if they are not achievable in the time required, goals could have the opposite effect.
"Set realistic goals, break them into pieces and celebrate them. So if the goal is to save $100,000 by the time you are 30, maybe this year the goal is to fully fund your Roth IRA. That is something achievable that you can work towards in the short term," adds Montanaro.
Automate as much as Possible
Another way to not feel the burn of saving all the time is to automate payments into your account.
"Setting up some sort of automated system where there is money automatically deducted from your paycheck is definitely the most effective way to create that positive inertia," Delorme.
Many employers offer the ability to deposit a certain percentage of your paycheck into a separate account, which can be a great way to robotize the process.
Budget with Visual Reminders
Another way to help with goals is to focus on what it is that you are saving for, rather than what you are missing out on. If there is a visual reminder, it may make saying no to a dinner out seem less like a chore and more like the smart decision.
"It can't just be about cut, cut cut," says Montanaro. "If you are saving for a new car or a trip to the beach, post some sort of visual cues that help you stay on track and drive by."
Just like a mood board, cut out some pictures of goals and tape them to a fridge or make a Pinterest board. Saving can be just as fun as spending.
Find a Financial Buddy
Setting goals and sticking to them are two entirely different things. If budgeting is a new concept and the word "finance" has you fleeing, enlist the help of a friend to help stay accountable.
'Research shows that those individuals who have a financial buddy do extremely well. We know from study after study that talking about money is taboo. But if there is someone who can help navigate personal finance, it will be a lot more fun," Kristen Robinson, Senior Vice President, Women and Young Investors for Personal Investing at Fidelity Investments. "They will be accountable to their friends, their buddy. It is like working out."
In addition to saying accountable, it helps to have a sounding board when trying to figure out your risk profile for investment or what your credit card contract actually means.
Live the College Life
Being broke in college is considered the norm, but graduate to the world of young professionals and it can seem like everyone has more money to throw around. And that's ok.
'There can be an expectation of a lifestyle that their parents built over decades as opposed to starting out that way," says Montanaro. "Look back and realize that it took your family time to get to where they are now. You are not necessarily going to get out of college and get your first job and have that same lifestyle."
Even with that dream job, fancy vacations, designer threads and eating out can add up fast. It is important to realize that your desired lifestyle is not necessarily achievable now.
Invest in Yourself
Although the media likes to bemoan the state of millennial's personal finance, one thing is for sure: time is on the side of young professionals. And while this is very big deal when it comes to retirement, it is also relevant when it comes to looking at a desired career path and figuring out how to become a high earner.
"Your biggest asset is your human capital, you have whole career ahead of you. Nuture that with education, networking, conferences and seminars," says Montanaro. "Make yourself more valuable as you go forward."
Alexandra Talty is the Editor-in-Chief of StepFeed, the homepage of the Middle East. After leaving New York City in 2013, she used her personal finance (and journalism) skills to the world, before settling down in Beirut, Lebanon. She is also on Twitter.