Easy ways to start saving
Updated: 6 days ago
Do you want to learn how to save money effectively?
Saving money is not a one-time activity but a process. In the long term, the habit of saving can change your life, and I trust that these simple ways will drive you to take the first step and then enjoy the results of your savings.
Saving can be compared to going on a diet. At first, you must control yourself, but after some time, it becomes normal, and the effects are visible all the time.
What is the secret to saving? The secret is to start saving. Don't think of saving as a sacrifice, because by spending wisely, you will have more money for what is important to you.
Take small steps
All this is not about immediately accumulating large sums of money. If you've never been in the habit of saving money, then you should start saving money gradually.
There are many ways to save, but no one learns how to use all investment and banking products in one day. So, where do you start?
Start by saving your money in a piggy bank. This is probably the oldest saving method, but it is still effective. Of course, the money collected in the piggy bank does not give you interest, but it is the first step to getting into the habit.
If you have never saved, the most important thing is to develop the habit. This means often saving, even a small amount of money.
Determine the savings goal
This one is also dedicated to identifying your savings goal.
Your goal can be a trip around the world or the renovation of your house. Suppose you are thinking of buying new furniture for $ 2,400 and you think, "Okay, I need $ 2,400 and I would like to buy it in a year. This means I have to save $ 200 per month.".
But why is knowing our goal so crucial in this situation? If you know what you want, it will be easier to do it, because you will be able to deny yourself the pleasure of a moment - "These new shoes cost $ 100, but maybe I really do not need them, and this month I will save $ 100 more to buy the furniture".
To meet your goal, you must give up other things, and it is easier to do so when you know your goal. If you are unable to track the expenses all the time, make sure to use a note and calendar app in your phone.
Pay yourself first
Although it is well known and straightforward, few of us make use of this principle.
When you get the money, for example, as a monthly work payment, you immediately transfer some of this money to your savings account.
Then with the remaining money, you pay all your monthly expenses.
Let's face it - we fail if we try to save money from what we have left at the end of the month. It's true because at the end of the month we have nothing left. Therefore, we must do it at the beginning of each month and deposit a percentage of our salary into another bank account.
I'm sure you know the basic principle of personal finance, which says:
Income - Expenses = savings
According to this principle, it seems that it does not matter if you save at the beginning or the end of the month. However, let's tweak it a bit to see the difference:
Income - Savings = expenses
What has changed? When you save part of your earnings in the first place, you have "less" money to cover your expenses. Less money means better use of it. Try and choose what is best for you and make use of business and financial calculators when necessary.
One of the essential principles of savings says: use the savings methods that work for you. This principle applies not only to saving money but to all personal finance principles as well.
The topic of saving is one that I want to touch on in this blog in more detail. If you have a favorite way to save money, share it in the comments. And if you think the information in this post could be helpful to some of your friends, share it with them.