“Save Money and Money Will Save You”
Jamaican Proverb
Your savings is a collection of funds you put away periodically that can be used in the future to gain protection from the harsh adversities of life. Without savings, unexpected events and emergencies can become large financial burdens. Therefore, they help an individual or family become financially secure.
To be considered financially secure, an individual should save at least six months’ worth of your monthly expenses. To reach this amount, it is recommended that 10- 20% of net income should be saved every month, until the appropriate amount of savings is reached. However do not stop there, once you reach your savings goal, just keep going.
It is important to note that saving is not putting aside money that is left after spending it is money you put aside before you start spending.
How to Start Saving?
When starting out, know that you can never have too little to save. You just need to start saving. Below are a few tips that will get you started:
-
Set SMART financial goals:
A goal is defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish while financial goals are specific targets to be met through smart financial planning. Goal setting helps you to focus on specific things that are important to you and makes the saving have a purpose.
-
Making trade-offs:
Simply put a trade-off is giving up one thing for another. A trade-off is a situation that involves losing one aspect in return for gaining another and is best seen in adjustments of your spending habits. For example, giving up a luxury such as decreasing your entertainment expenses to add more money to your savings is a trade-off.
-
Learn the art of delayed gratification:
This helps in reducing impulse buying. A good principle such as learning how to master the thirty-day rule when you want to buy something, will help you gain control f your spending habits. Usually, you will find that the urge to buy has passed, and you will have saved yourself some money simply by waiting. If you are undecided about a purchase anyway, waiting a while can give you a better perspective on whether it is truly worth the money.
-
Budget:
A budget is a plan of the way you spend your money. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to and the amount you need to put away in your savings account.
-
Put aside all your loose change daily:
Look for a piggy bank and drop in a few coins daily, because after all, a journey of a thousand miles begins with a few steps.
Further reading:
