Whether you’re dreaming of your next holiday, or maybe even your first home, it is always important to start saving money early to get a head start on your future goals.
Saving money can be difficult for anyone, no matter your income. Maybe you’re finding it hard to cut back on spending? Or, just simply don’t even know where to start?
This article intends to show you how to save as best you can by following 5 simple steps.
Step 1: Set a Goal
Before completing any other steps, you’ll need to sit down and set a goal – what are you saving for, how much do you need to save in total, and in what time frame do you want to reach your goal?
Understanding what your goal is and what you need to get there will provide you with an excellent mindset of determination and willpower.
Step 2: Set a Weekly Budget
At the core of any savings plan is setting a budget. Whether you decide a weekly or monthly plan, budgeting helps you prioritise your expenditure and find a comfortable balance between saving and spending.
The best way to do this is to have a look through your credit card statements and receipts so you can work out all your usual basic living expenses e.g. rent, groceries etc. From this, you can also check what additional expenses you could maybe do without, to guarantee you’re achieving your savings goals.
If you’re spending more than you earn, you’ll need to reassess and ask yourself what you could cut back on.
Step 3: Open Up a Savings Account
Creating a savings account is an excellent method to ensure any leftover money – after you’ve paid off necessary bills, are placed in an account that has limited transfer facilities, high interest rates, and is usually not linked to a debit card.
Most banks also allow you to create goals within your savings account, to make sure you stay on top of reaching your desired target.
Step 4: Put A Sum of Money Away Each Week/Fortnight
This step is extremely important, and one I religiously follow.
After you’ve created your savings account, you can set up automatic, scheduled transfers from your main account to your savings pot. If you have the same weekly income, you can work out how much you’ll need for basic living expenses throughout the week, and put the rest away in a secure account.
I’ve found that this strategy is super helpful and effective as it won’t matter whether you forget to transfer money to your savings account – the bank app does it all for you!
Step 5: Control Your Impulse Spending
Last but not least, to make certain you’re saving as best you can, you’ll need to try and limit impulse spending. This can include reducing online shopping on unnecessary items, and reducing dining out and takeaways.
Don’t see this as saying you can’t go out or have fun, just make sure you remember what you’re doing this for!
There you have it, saving can be tough and challenging, but if you put in a little bit of effort, your dream goal can be achieved.