Our world is changing rapidly – economically, technologically, environmentally, etc. The cost of living is also increasing with the same speed. Now-a-days, dreams come with a high price tag. Evidently simple needs are now looked on as luxury or dreams because of the high cost associated with it. One requires a high income or a well planned budget to fulfill these needs. Saving money is difficult and finding ways to save money is even more difficult. But it is certainly within reach, especially if one begins early. Saving money is like sowing seeds, so we can enjoy the fruits in the future. It might not seem pleasing in the present but it definitely helps us earn great rewards and benefits in the future. However it might not be as easy as it seems. Sometimes the toughest part about saving money is just getting started. These simple tips will help you save and manage money and help you develop a simple and realistic strategy towards your goals.
- Create a budget – The first step towards any savings should be budgeting. Budgeting refers to the process of estimating the income/revenue and expenses over a specified period of time. It helps you to ascertain in advance whether you will have enough money to do the things you need to do or would like to do. It helps you find a balance between spending and saving money. It helps you to gain some sense of financial discipline. One must stick to the budget plan and avoid exceeding the allocated budget.
- Set financial goals – Setting financial goals refers to setting realistic and measurable targets to achieve within a set time frame. Financial goals differ from person to person depending on what stage of life they’re in. These goals could be short term, mid-term or long term goals. This helps to focus on achieving these goals and will naturally lead you to save more.
- Make a savings plan – Once the goals are set and the budget plan is in place, it is time to look down on savings. One must try to save at least 10 percent of their earnings. If the expenses are very high and you’re not able to save then you must reconsider the budget plan and cut down on non essential expenses or things that could spend less on.
- Invest – Idle money is just a stack of money that wouldn’t grow by itself. To grow money, one needs to learn and invest that money in the right place at the right time. There are several ways to invest money securely. One can invest in stocks, sip mutual funds or maybe start a side hustle, etc.
- Build an emergency corpus – It is important to save for the unseen emergencies in the future. This helps you be ready for situations like sudden loss of job, medical eventuality or sudden financial support required by a family member, etc. This amount should be invested in such a place that it is easily accessible and is not subject to market fluctuations.
- Create a savings account – It’s easier to reach your goals when you have the right account for your goals. Savings accounts may not pay much, but they’re still helpful. For example, In Nigeria, one can choose whether to open a savings account in GTBank or any other bank. The factors that must be considered before choosing a bank are interest rates, minimum balance criteria, transactions or service charges, ease of online access, offers, etc
- Track your expenses – A great step towards saving money is to figure out how much you spend and keep a record of all your expenses. This will help you review your spending habits and cut off on avoidable spendings. One can maintain excel sheets or make use of online expense management tools.
Saving money requires time and efforts. If one really wants to achieve the level of financial freedom you desire you need to put in enough effort and improve on your saving plans and manage money better.