It is quite a herculean task to save money for either retirement, to buy that dream house you have been longing for or just to cushion yourself on a rainy day. While most of us are aware that saving money is the wise thing to do we always find ourselves spending more and saving a very little. Below are some useful steps on saving money.
Apportioning your pay
Allocate a certain amount of money that you want deposited in your retirement or saving account every month. Have a separate saving account from your checking account and request your finance department to deposit a portion of your money to that account every month. For independent contractors like freelancers, they can opt to deposit some amount manually to their savings account. This requires a high level of discipline.
Debts should be avoided where necessary
We find ourselves building debts which we can easily avoid. But in some cases we are forced into debts like when buying houses which require a loan. It is however important to ask yourself if the debt you are about to take is really necessary? If not avoid it at all cost. Make a sizeable down payment when purchasing properties or goods on loan. Paying a huge sum upfront means that you will take a shorter time to clear the loan and lessen your interest.
Goal time limits
It is very important to have a time frame for those goals you want to achieve as this will awaken your desire to save more. If you intend to be a homeowner in the next 2-3 years it’s important to know the asking price of your dream house. Armed with information you can save towards making a down payment. In most cases you will be required to pay 20% of the asking price of the house asking price. Goals for short term goals should be more robust as they have to be fulfilled faster.
Have a Budget
It is impossible to commit to your saving goals if you don’t have budget to help you know your expenses. At the start of each month budget your income accordingly assigning major expenses a part of your income to curb any possibilities of wastage.
Start saving now
The early you start saving the better for you as you are guaranteed to earn interest. Saving accounts have a interest percentage rate for people who save for long period of time. It does not matter if you earn very little or you consider yourself too young. You will develop a saving culture if you start saving early in life.
Lead a frugal life
You will be surprised by how much you can save by doing aware by some avoidable expenses. First to go is luxuries expenses that will cost a lot and add very little value in your life. Do away with cars that consume a lot of gas and unsubscribe from cable TV. Buy home furniture from thrift stores. Although image may a lot to you, find a cheaper housing if you ever dream of being a homeowner. Negotiate with your landlord for cheaper rent and he will most likely agree. If you have your own garden, grow your own food and save the money. Avoid expensive addictions that can eat your savings.
The abovementioned tips on how to save money provide the road map that you should take in your quest to achieve your goals.