It has been said thousands of times that it is important to save. Your savings serve as your backup plan in case things gets messed up for you financially. However, at one point or another, you face different challenges on keeping your savings intact or even starting saving in the first place.
For those who are persistent enough to start saving early, when they hit a bump on the road, they forget about continuing on with their financially responsible habit. On the other hand, those who just can’t seem to start saving may see it as a hindrance to their goal rather than a tool.
To finally learn how to save consistently, remember these two tips, and soon, you can enjoy living a more financially secure life.
People become overwhelmed with saving because, oddly enough, they see the money they set aside for this cause as a form of “expense” that they have to pay every time money comes in. Unfortunately, this mindset can never work if you really want to start saving soon.
To avoid this financially unhealthy thinking, you need to start seeing money as a tool that can help you pave the way towards your goals. As it is a tool, remember that money is a resource that you need to appropriately allocate to certain aspects in your life. With that said, you need to be more organized than usual in order to take that first step to financial freedom.
Find ways to organize your cash flow. You can use a logbook to jot down money that comes in and out your pocket. You can also use spreadsheet programs to be more efficient. There are also a lot of applications you can download to ensure organization with your funds. Whatever option you go for, you need to find a way to see the bigger picture with what is going on with your money.
For instance, jotting down your expenses on food can give you a different perspective on what, where, and how often you eat. When everything is written down, you can see exactly what you are spending and decide whether it’s the appropriate amount. You can also determine if there is enough wiggle room for you to reallocate some of your budget to other aspects in your life like in transportation, life insurance, or occasional leisure trips.
Take it Slow
Some people feel the need to start big in terms of their savings. Primarily, this is due to the pressure they feel when they learn that other people have “big savings.” They immediately act on their ego without thinking about it much or planning enough to actually get things done.
In reality, the best way to start saving effectively is to start small. Yes, you can use that piggy bank you have stored away, collecting dust instead of coins. Those who earn well (but can’t save well) can start putting in loose change or spare cash to start off their financial journey.
What this does is teach you how to create the habit of saving. If you have just started working and have just received your first paycheck, put an amount that you feel comfortable with. In the same way, if you are a tenured manager but simply can’t start saving for whatever reason, start building up your home savings with your piggy bank.
When you have created the habit of setting aside money regularly, you begin to realize that you need to put a little bit more. After a while, you add a little bit more until such time that you want to save in a bank, then go for time deposits and ultimately, invest. It may sound too far out, but huge things do start with something small.