HOW TO: SAVE MONEY THE RIGHT WAY

Key Points

8 WAYS TO SAVE MONEY THE RIGHT WAY

Knowing how to save money the right way is a significant life hack for survival. Keeping for a lot of people isn’t so easy, but the first step to saving is to start.

Let us look at some ways to help you be better at saving.

1 KEEP RECORD OF EXPENSES

The first step to saving money the right way is to keep a record of all your expenses. For you to develop a savings culture, you will need to know how much money you receive and how much money you spend on a daily, weekly or monthly basis.

Once you have your information, arrange the numbers into categories, such as food, house rent, bills. The next step is to add all the amount. Make use of your credit card, alerts and bank statements to be sure you are calculating the correct figures. when you have a good record of expenses then you can ascertain how much you can save consistently.

2 BUDGET YOUR SAVINGS

The next step, when it comes to saving money, the right way is to budget your savings. After you have gotten an idea of how much you spend monthly, you can begin to organize your recorded expenses into a reasonable budget. Your budget should clearly state how your costs amount to your income. Clearly outlining your budget will give you better control over your expenses and will, in turn, help you to limit excessive spending. Finally, ensure you include costs that often happen even if it is not every month, such as car maintenance.

3 REDUCE YOUR SPENDING

One of the things that hinder people from saving the right way is excessive spending. If you are one of those can never seem to save because you always never have enough to keep, then it’s time to cut down on your spending. Focus on needs first rather than wants. Prioritizing your spending is crucial to be able to have some money to save for the future. If you are not disciplined in your spending, you will never have enough to keep.

In addition to that, there’s always a cheaper way to live. You can still get quality items at a more affordable rate. If you know the amount of salary you earn is not the kind that allows you to own certain things; then there’s no point trying to hold them. The saying “cut your coat according to your size” speaks loud and clear on this point.

4 SET GOALS FOR SAVING

One of the best ways to save money the right way is to set goals. Have a reason why you are saving, find out the cost of what you want to save for. It could be a wedding, a new phone, a car etc. After you have gotten the price, based on how much you make, plan how long it will take you to save that amount.

Your goals can either be a long term goal or a short term goal. Long term goals are usually for purposes that cost more money and take longer time to achieve, like saving for a house or a car. Short term goals take a shorter time to make and cost less such as buying a new phone.

To set goals, especially if you are still learning how to save, it will be a good idea to set a small but yet achievable goal that is short term. Think of something beautiful and substantial enough such that you can’t pay for it immediately. Achieving smaller goals and enjoying the rewards of what you saved for has a way of encouraging you to save more in the long run.

5 PRIORITIZE YOUR GOALS

Aside from your income and expenditure, another thing that will surely take some of your savings is your goals. If it is a long term goal, then you will need to start saving early enough. Prioritize your goals and plan how you spend money around it to be able to achieve your goals.

6 CHOOSE THE RIGHT SAVINGS PLATFORM

If you have a long term goal to achieve, you clearly can’t save in a piggy bank. Try as much as possible to get an account to save to. Fixed deposit is a good one because you wouldn’t be tempted to touch the money since you can’t have access to it until after six months or a year or even four years. All depending on what you are saving for. You also don’t need to have a single account; you can explore your options. Before choosing a good savings platform, look out for things such as balance minimum, fees charged and interest rates, considering all that will help you choose the right platforms.

7 AUTOMATIC SAVINGS

A lot of banks offer automated transfers from your savings account. You can decide when, how much and where to transfer money or even split your direct deposit, so a portion of every income goes directly into your savings account.

Automated savings will prevent you from being tempted to keep the money you are meant to save. It also develops a system of consistency because your money is always paid at a particular time.

8 OBSERVE HOW YOUR SAVINGS GROWS

Go over your budget and check your progress every month. This will help you stick to your personal savings plan; it also enables you to identify and fix problems quickly. Understanding how to save money may even inspire you to find more ways to save and hit your goals faster.