SAVING MONEY IN THE SIMPLEST WAYS YOU CAN'T IGNORE
Saving money isn’t always easy. It’s a hard habit to build but it’s even harder to know where to start and how. No matter what your income is, here are a few steps to get you started.
1. RECORD YOUR EXPENSES
The very first step in saving is to identify how you spend what you get. Living expenses take the bulk of your spending. This includes rent, utilities, shoes, coffee dates etc. Record and categorize them into necessities and wants.
Your spending priorities are your necessities. To build a saving culture, you will need to forego wants, especially luxuries.
2. BUDGET FOR SAVINGS
Write down a budget.
Note: many people don’t like the name ‘budget’. It gives the connotation of work or undesired limitation. Could renaming it to ‘my financial plan’, ‘become-rich plan’ make this underestimated practice fit in our financial fitness journey.
Your budget should outline how your expenses measure up to your income — so you can plan your spending and limit overspending. Be sure to factor in recurring expenses.
Tip: Include a savings category — aim to save 10 to 15% of your income.
3. FIND WAYS YOU CAN CUT DOWN YOUR SPENDING
The purpose of recording your expenses is so that you can pin out some nonessentials that happen to cost you a lot of money. Some can be underutilized paid subscriptions services such as Showmax and Netflix and so forth.
Cutting down some of these expenses can leave you with a good amount of money to save. Here are some of the expenses that you can cut off:
- Eating out expenses; opt to make your own food.
- Underutilised paid subscriptions like streaming services and memberships et. c
- Expensive products you prefer. You can instead, use cheaper alternatives or take advantage of sales and discount offers
4. SET SAVINGS GOALS
One of the best ways to save is when you have a goal as to why you saving. It keeps you grounded and motivated.
This could be either short term or long term.
SHORT TERM( a car, a 3–7 months emergency fund, pay off a loan etc.)
LONG TERM(save to by a house, invest in a business, save for retirement, etc.)
Identify a goal that you would like to accomplish and how much it needs and get started.
Tip. set a short term goal for something but you don’t have the whole money to purchase it or make it happen, this could be a new phone, laptop or vacation. This will give you a boost psychologically to save for long term goals.
5. DECIDE ON YOUR PRIORITIES
After your income and expenses, your goals are by far the most important. Your goals will influence how you save and why you save. especially long term, so set your priorities right.
6. HAVE THE RIGHT TOOLS
Do you have the right tools to help you in your savings journey?
Open a savings account, you can automate it if possible so that you don't get into contact with the money or furthermore you can lock the savings account for the period you intend to save. This restricts you from withdrawing at the slightest provocation.
