Wednesday, November 24

6 money saving tips to achieve your goals

The cost of living is forever increasing, so saving may sometimes seem impossible but it’s never too late to have a ‘saving money plan’. Don’t wait for a financial emergency to pressure you into stocking away more money. The only way to grow your nest egg is by starting early and remaining consistent, even when times are bad.

Before you commit to a savings plan, determine what it is you are saving for and work backwards from there. Having concrete, written goals is key to achieving your dreams.

Here are 6 money saving tips:

  1. Start as early as possible - Successful savers learn to save at a young age. The earlier you begin to save, the longer you have to reach your goals and the higher the likelihood of reaching them. If you’re a parent, you can also teach this to your children. Start encouraging children to save by paying interest on what they have already saved during the month. This is a great way of keeping children motivated to continue saving more money. It’s important to teach children the benefits of saving money. After all, the sooner you start, the more you can save.
  1. Keep track of your spending - You need to know how much you’re spending before you can decide on how much you should save. People spend a great deal more than they realise, so recording all your expenses will help you work out where you can cut back. You can start keeping track by using simple tools available online or by simply keeping receipts and checking them out daily or weekly.
  1. Pay off debt - To have one debt cleared, no matter how small it may have been, can encourage you to keep on saving to pay off other larger debts.
  1. Don’t reduce your savings - After you pay off that massive loan, it's natural to want to use the extra money for clothes, entertainment and whatever else you can think of, but that's exactly what you shouldn't be doing. Take that same amount and add it to your savings/investments account.
  1. Automate - Deduct a certain amount from your salary every month to put into savings. You can take things one step further by setting up an automatic transfer to ensure the amount goes into your savings account the day after every pay day. Automation ensures that you don’t need to worry about making your savings or forgetting to save.
  1. Watch out for fees - It's easy to forget, but it can cost money to save money. You'll likely have to incur expenses like monthly maintenance fees on savings accounts and deferred sales charges with mutual funds. That's normal, but the best savers, watch those costs.

Also, remember that saving money doesn’t mean you have to live too frugally and give up your morning coffee. Once you have prioritised your financial needs, you will know what’s important to you and what you can do without.