Saving is critical to achieving financial freedom. However, with a rise in the cost of living and a struggling economy, many people find it very difficult. In this blog, we will be sharing a few tips and tricks to help you get better at saving.
Keep track of your expenses
If you want to be better at saving, the first thing you have to do is record all your expenses. Make a list of all your expenses, big and small, to get a rough idea of how much money you spend monthly. Alternatively, use your bank or credit card statements or a spending tracking app.
Budget for savings
Now that you have figured out how much your monthly expenses cost, you can begin creating a workable budget. A budget will help you find a balance between your expenditure and savings by allowing you to plan. Give priority to your basic living expenses such as rent, mortgage payments, and do not forget to factor in bills that occur regularly, even if not monthly. While creating your budget, make a savings category, and try to put aside at least 10-15% of your salary.
Set saving goals
Setting a savings goal helps you remain consistent. Set both short-term and long-term goals, and then figure out how much you need to save to achieve them. It could be a vacation, a car, a mortgage down payment, or even retirement. Ensure that your target amount is achievable to make saving easy for you.
Find ways to cut your spending
If your expenses are so high that you are unable to save your target amount, you will be required to cut back, especially on your wants. Go through your budget again, and identify nonessentials that you can cut back on, such as eating out and entertainment. Also, cancel any monthly subscriptions and memberships that you no longer need.
Pick the right tools
When saving for both short and long term goals, you will need a savings account. This is essential because it separates your savings from the rest of your income. Talk to your financial advisor about the different ways you can save and invest your money. If you are employed, they can help you with employee benefits management, among other things.
Make savings automatic
Most banks offer automated transfers from your checking account to your savings account, allowing you to put aside your target amount as soon as you receive your salary. All you have to do is choose when, where and how much money is transferred. Doing this will eliminate the temptation to spend your savings on other things, and it will make saving an easy and stress-free experience.