The reason why most people find it difficult to save money is that they never seem to get around to it and by the start of the second week or so; all there hard earned money has quickly disappeared. This leaves a number of people fending for the rest of the month on little to money at all. In this article, we’ve listed out a step by step guide for you to start saving.
Step 1: Keeping track of your expenses should be a huge priority for anyone who is looking to save money. Categorise your expenses as essential and non-essential expenses. Essential expenses are those that require your immediate attention such as food, rent, transport, etc. While non-essential expenses include your expenses on movie tickets, gym membership, fast-food takeaways, etc.
Step 2: Once you’ve sorted out your expenses into two categories; start planning a budget that is utilised at the end of each month. Your budget should reflect your expenses in such a way that you understand where you are overspending and how to curb the overspending. Your budget should also include expenses that happen once in a while such as costs for house repair, vehicle repair, etc.
Step 3: After you’ve drawn out your budget; set a goal for the amount you’ll be saving per month. 10-15 percentage of your income is a good place to start. If that percentage seems too high, then we’re sorry to say that you need to reassess your expenditure. Once you’ve set the savings percentage; decide on an objective that you’re trying to achieve. A short-term goal can be saving towards your emergency fund or going on a vacation at the end of the year. A long-term objective can be saving towards your retirement plan or towards your down payment on a house that you might buy in 5 years.
Step 4: In this futuristic age, tools and automation are best friends when it comes to saving. Tools such as Mint help you plan out your budget. We understand that it is painstakingly difficult to set aside money all of a sudden; so what we suggest is to automatically send your cash to a savings account as soon as you receive your pay-check. If you’re a little sweet to your HR at work, you can even put in a request to send your salary to two separate accounts at the end of each month; thereby taking away the need for you to transfer.
Follow these steps, and soon you will start to see your savings grow. Keep at it when the going gets tough, and you will reap the benefits in the future.