Ever felt like, whenever you start saving for rainy days, it rains the next day? That is how trying to get into saving habits is. Just when you have set aside some cash, a need might arise and the cycle keeps happening, so you almost never have savings. But don’t worry, your savings habits might get better if you heed the tips below:
Develop a money management system
It is easy to blow through your paycheck if there’s no specified method for your spending.
One effective way to do that is to employ the 50:30:20 rule. Where 50% of your monthly income goes into essential needs like rent, food, utility bills, and transportation. 30% of your income goes into wants and other expenses that enhance your lifestyle. Here is where items like gym membership and TV or streaming subscriptions fall. Finally, you assign 20% of your income to savings and investment.
With such a money management system, you will find it easier to save money and multiple it through investing while comfortably taking care of the monthly bills.
Always pay yourself first
Imagine how tragic it is to work hard every month just so you can give it all up through bills and expenses. You deserve a portion of your hard-earned cash and that portion should be about 20% of your monthly income. You are less likely to stick to your savings plan if you wait to see what money is left over after paying bills. Determine how much money you intend to deposit into your savings each month in advance. And if you get a raise or finish paying debts, increase the amount of money you put into your savings accordingly.
When possible, set up automatic transfers
Setting up automatic transfers from your current account to your savings account can help you start saving money without thinking about it too much—as long as you have a budget in place and understand your costs and savings objectives.
Simply create as many savings accounts as you need for your various financial goals, and then set up automatic monthly transfers from your checking account to your savings. This way, the burden of the monthly decision is off your shoulder.
Watch your mindset about money
Getting into a saving habit requires more than reading tips on what to do. Your finances are heavily influenced by the attitude you have about money. For instance, how do you regard windfall money? That amount you never expected, say a birthday gift or a work bonus, do you blow it all off in celebration? And how do you treat small purchases like buying coffee or ice screams? Are they too small to be accounted for? And how about KES 100 change or KES 50?
Remember saving does not only involve the amount of money you put aside. It is your attitude toward money and financial goals that will help you sustain a better savings habit. Analyze your own spending habits. Keep just the habits that you believe are worthwhile, and reject the rest.
Here is a small truth about money and saving you need to understand: unaccounted cash will create its own purpose. That is, if you don’t assign specific goals to your money, you will never lack aimless things to use that money on. The one concept I want you to get out of this blog is this; a successful saving habit goes hand in hand with an intentional budgeting habit. You will find it much easier to develop a better saving habit when you have control over where your money goes.
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