Everyone has the ability to save, even if it’s only a small amount. All that’s required is a bit of planning and a dash of self-control.
Yes, monthly income is going to impact your ability to save but that doesn’t mean that it’s impossible. Here are a few tips to help you on your way:
1.) Assess your current financial health. Sit down and calculate how much of your paycheck goes toward expenses. This means everything – Mortgage/rent, credit cards, clothing accounts, personal loans, car repayments, utilities etc. Once you’ve established your current situation, you’ll be in a better position to start making changes.
2.) Draw up a budget. While a budget can feel restrictive to an extent, it will help you gain control over your finances because you’ll know exactly how your money is being spent.
There are a number of budget calculators available online to help you with this. When you’re putting your budget together, don’t forget to make provision for savings. A good savings ball park figure is 15% of your income. If this isn’t possible, aim slightly lower.
3.) Open up a savings account. Do a bit of shopping around and find a bank that offers a savings plan with a decent interest rate. Accounts that give you a better return on your investment (based on interest rate) may require you to deposit a larger sum of money initially. If you’re considering longer term investment it may be worth looking into money market or unit trust options.
When you’re evaluating potential options, consider the following:
*The interest rate that the account offers
*Transaction fees, i.e. fees associated with the transfer, withdrawal and depositing of cash.
4.) Manage your store accounts and credit cards. Having accounts is not a bad thing, provided that you’re making the payments by or (better yet) before the payment due date. Just don’t let the situation get out of control. Paying on or before the due date will also ensure that you build up a solid credit history, which will be beneficial if you run into financial trouble.
5.) Watch the spending on junk food and eating out. This is one area that most of us can relate to, and if you’re pressed for time eating junk food becomes that much more appealing because it’s convenient. When we buy it we think to ourselves, “I’m tired, don’t really feel like cooking” or “It’s cheap, no biggie”. These excuses would be fine if it really was just once but that’s never the case. Try to limit the number of times you buy junk food in a month, it all adds up. Try not to eat out for lunch at work too much either. Take a packed lunch instead. You’ll be saving money and you’ll be saving your body from all the extra calories.
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Once you’ve created your new savings account, consider setting up debit orders for the amount that you’d like to save each month (Let’s say $250) this way you automatically save money without even thinking about it.
This article was written by Jolly_Roger who is an avid gamer, occasional surfer and loves the outdoors.