We all have goals in life. It could be the business you want to start, the schools you want to send your kids to, the vacations you dream of, a comfortable retirement, a down payment for a house, or a new car. Whatever your goal may be, setting money aside is a useful tool to help you achieve your financial goals. And best of all, you can have what you want without getting dragged down in debt.
Most people, don’t save as much as they would like to and some don’t even save at all. It’s a reality that today’s numerous expenses, home and food prices may make saving seem less possible than ever, but with the right plan and effort, saving money is not only possible, it’s easy!
Here are three practical tips that work when you put in the discipline and practice of engaging them.
Make Saving a Priority
You’ll be more likely to save money if you make it a priority. Sit down and figure out what you’d like to save money for (retirement, a house, car, dream vacation) and how much it will cost. Then make your plan:
- Set a timeline for when you’d like to reach your goal, make it specific enough.
- Set a schedule by dividing the total goal amount by the number of weeks, months or pay periods between now and your goal date. This breakdown should be based on the amount you are willing to contribute to this goal.
- Be vigilant by treating your savings contribution just like any other must-pay expense, such as rent or groceries. This is the discipline that will yield results.
Find Money to Save
While it may seem difficult sometimes just to make ends meet, chances are you have extra money you didn’t even know about. Here are some ways to find it and put to use these extra cash:
- Keep track of everything you spend for a week. You might be surprised what you’re buying, and what you can do without. Like the occasional snacks, traffic treats or unplanned lunches.
- Make purchases with cash. This can help you stick to a budget and avoid impulse purchases. Simply decide ahead of time how much you want to spend and then set aside that amount in cash before you go shopping. This is a simple but key practice to ensure you stay within your budget. Credit cards give us a false sense of unlimited funds.
- Also, conserving electricity/airtime/data payments can make a big difference. The less you pay for your utilities the more you have in savings. In fact, a recent survey by the National Bureau of Statistics shows that for the majority of households, the amount spent on mobile phone talk plans is greater than what is spent on feeding. So this is a major area to pay attention to.
- Rank your nonessential expenses. Keep the ones you like the best and cut the items on the bottom of the list. Ensure that this list is as short as possible. The less you spend on non-essential the more you have for the essential. This does not encourage you to not live, it just encourages for better spending decisions.
- Pack a lunch. Or cook more dinners at home. Eating out at restaurants can eat up a lot of money that could be saved.
Pay Yourself First
You’re probably inclined to pay everyone else first whether it’s your landlord or your domestic staff or the school fees. But it’s vital to start paying yourself first by saving money. Once you’ve made a contribution to your financial longevity and well-being, then you can divide up your money to cover everything else. Don’t worry, you’ll more than likely have plenty left over to cover everything you need.
Most banks have actually made this process easy. You can have your bank automatically transfer funds from your income account to your savings account so you don’t even have to plan your budget with your savings.
Start putting these tips into action and see the impact it makes to your bank account.