Consumers must do more to save money than reduce expenditures

When it comes to the concept of "saving money" most people are probably going to turn their attentions to finding ways they can keep some of the costs down in their everyday lives. Whether that means clipping coupons or hunting for prime deals online, they may put a lot of effort into this kind of issue but perhaps not necessarily get as much of out it as they'd like. Some financial experts say that this is because "saving money" is really only half the battle for those who actually want to save money.

The reason for this is quite simple: People who are able to cut costs on, say, groceries, aren't necessarily going to actually put that money to better use in other aspects of their financial lives, according to a report from USA Today. If they're able to reduce their food bill by $100 in a month, but they find that they're still not building up their savings as strongly as they perhaps should or would like to, then they need to examine where that $100 is going. If they just end up spending it on entertainment or a clothes shopping spree, then their ability to "save" actually just gave them the ability to spend more on other things.

What's the issue?
That's not to say that freeing up some cash to buy some new work clothes or relax with a night on the town is a bad thing every once in a while, but if this is a process that repeats itself over and over, the ultimate goal of saving money for a rainy day is going to be much harder to achieve, the report said. And one of the big issues that consumers often run into here is not their immediate eschewing of all their savings plans, but rather that they are tempted to spend more.

These days, people can check their account balances from anywhere, and if they're used to having, say, $500 in their checking around the middle of the month, but check their accounts and find that they have $700, that can have a negative impact on their habits, the report said. Now, they might see something they want and think, "I can afford that," and spend the money that they should have just transferred into savings if they really wanted to stick to their financial plan.

Getting smarter about this problem
Those looking to avoid this type of thing, though, may want to shift the ability to check their balances from anywhere back into their favor. If a person knows how much they "should" have at a certain point in a given month, then they can quickly and easy transfer the difference into savings, and then no longer have the temptation to spend the money.

That, in turn, can quickly build up significant savings for the average consumer, and that money can later be put to better use, such as by using it to pay down outstanding balances or simply waiting until a financial emergency arises.