Getting started is probably the hardest thing when it comes to saving money, and this isn’t made any better with the barrage of financial pressures we have to deal with daily. Somehow there’s always an unavoidable bill that requires your attention, and this can distract you focusing on your savings goal.
This article discusses five strategies that can help you create a successful savings plan and stick to it.
Keep Track of your Expenses
The first step to successful saving is to determine how much you spend. Records all of your expenses; this will include every cash tip, household item you purchase, and even coffee at the pub. Once you have this data, write down these figures in categories – be it mortgage, groceries or gas – and total the amount spent on each. Keeping track of your expenses gives you control over the outgoing, and helps you craft a functional savings plan.
Cut Your Expenses
Now that you have an accurate data for your expenses, it may be time to cut back on your spending if it is too high. Identify the inessentials that will require less spending on, such as eating out and engaging in entertainment. You may want to consider cancelling certain subscriptions you do not use, particularly if they renew automatically. You may also discipline yourself to avoid eating at expensive spots and try the cheaper places instead.
Set a Savings Goal
The most successful people always have a WHY behind their actions. So, why do you want to save? Are you getting married? Or is it because you want to want to go on a vacation? Perhaps you want to plan for retirement or make preparations for the unexpected. Regardless of the reason for your WHY, determine how much you will need to accomplish that end goal and how long it will take you to save it. Write your goal down and place it in a visible place to act as a constant reminder.
Create a Realistic Plan
Based on your saving goal, it is now time to create a realistic plan. As most financial experts would say, it makes sense to ‘pay yourself first’. This simply means that you save a certain percentage of your income before doing anything else. Regardless of the amount you decide to save, just start. You will soon realize how you can cope very well without that money.
Make Plans for Fun and Rewards
Saving shouldn’t deprive you of fun. Leave room for a little bit of fun in your budget as this is a great way to enjoy your journey. For instance, if you achieve a weekly or monthly saving goal, present a fun and pocket-friendly reward to yourself. This could be anything from treating yourself to dinner or going to the movies. By rewarding yourself as you make progress, you remain motivated and remind yourself of the importance of your journey.
By following the steps outlined above, you should be able to create and stick to a successful savings plan – one that works for you now, and helps you build a safe financial net over time.