When someone mentions saving to you, what do you think? Many people often lament that there isn’t enough money at the end of the month to save. When your expenses are greater than your income, it can be a tall order to voluntarily put money away for a rainy day when every day is seemingly full of torrential downpours.
In reality, savings and financial success are a product of many different good financial habits that people make time and time again to help support themselves. Regardless of how dire the situation may be right now, addressing your relationship with money and being honest about your income and expenditures will help you on the road to being in a position to begin a savings fund.
Even small amounts count
Although you may be committed to saving money, you may find yourself falling into the trap of spending an extra $5 here and $10 there, thinking, “It’s not a significant amount. It’s something I’ll never forget.” Depending on your age, this could prove to be a catastrophic blunder.
Understanding the time value of money, or the concept that $1 today is more valuable than $1 a year from now, is one of the most important aspects of saving money. This one money-saving strategy could help you transform your balance sheet over the next ten years, as it will free up funds that can be invested in long-term investments.
The more time you give your money to develop, the better off you will be.
Savings come first
The single most effective method of starting to save money is to employ a concept known as “pay yourself first.” This strategy has been demonstrated time and time again to be successful in influencing people to change their behavior successfully.
It is essentially developing the discipline to set aside a specific amount of money from each paycheck for future savings before paying any other expenditures. The majority of people set a particular percentage to deduct from their wages each month, such as 10 percent. Put this money into a savings account that earns you interest or rewards, such as a Prize-linked savings app.
Finding money to save
Saving money can be a challenging task at times. Life is never straightforward, and it can frequently throw curveballs, such as needing emergency repairs or injuries, which cause us to fall behind on our savings goals and disrupt our daily routine.
Sadly, they are common in life, and even in the face of financial adversity, being able to identify small savings can support your goal of building a savings pot.
For example, you can choose to walk home rather than taking the bus a couple of times a week or when the weather is good, or choosing water instead of tea or coffee when dining out.
Automate the transfer of funds from your checking account to an investment or savings account, and do the same with your paycheck. The money you don’t “see” accumulates without you feeling like you’re being punished for it.