Most of us know that we should save more money. However, we keep making excuses and end up wasting more money than we should.
The common excuse for not saving is that you either think you can’t afford to save or you simply don’t bother. The truth is, most people do not have enough savings to cover unexpected expenses for health care, car repair, or other type of emergencies. To protect yourself from debt and stress, you have to start saving as soon as possible. You need an emergency fund that you can access anytime to cover unexpected expenses, as well as a long-term savings account. Here are some useful tips to get into the savings habit, so you’re never caught off guard.
1. Track your spending
You may be surprised to find out where your money is really going every month. You can do this by tracking your spending habits over several weeks. You’ll get a clear picture of where your finances stand. If you are spending too much money on entertainment, dining out and other things you could do without, you should consider cutting expenses in those areas.
2. Stick to a budget
After determining where your money is going every month, it’s time to make a budget and stick to it. Instead of wasting money on things you don’t really need, place that money into your savings account. That doesn’t mean you shouldn’t enjoy life anymore, it just means that you should reduce your spending on luxury items so you can save more for the future.
3. Set a monthly savings amount
In order to watch your savings account gradually increase, you need to commit to saving a certain amount on a monthly basis. This means that you must put this amount into your savings account first thing after receiving your paycheck or set up an automated debit order.
4. Start small
Thinking that you need to save a fortune can seem overwhelming. It’s better to start small, with as little as you can. Focus on your goal – which is to save a lot – but take it slow, so you’re not destined to fail.