The best thing about having money is that you get to spend it on the things you need or those that you’ve always wished for. Nonetheless, as we all know money is a scarce commodity that should be well accounted for. If you don’t want to end up broke. One of the main challenges most people have is that they don’t know how to save their money for future use. However, with the onset of banks and other mobile banking platforms, saving has become much easier.
Here is a step by step guide to help you build a savings plan:
- Record your expenses
The first step you should begin with is; knowing how much money you spend daily. Whether it’s the newspaper, coffee, snacks or lunch you eat on a daily basis, you have to account for every penny you spent. After you have the data, you can categorize the expenses and sum up the amount. Additionally, instead of paying with cash, use credit cards or bank statements.
- Make a budget
One of the main reasons why people spend too much money is due to lack of a budget. List down the things you need and allocate a reasonable amount to each based on your income. Ensure that you also allocate some money for expenses that have to be met once in while such as car repair.
- Create a saving plan
Since you now have a budget, you should also incorporate a savings category in it. Try as much as possible to save at least 10-15% of your income and incase your expenses are too high, cut them off. You can achieve this by identify the things yu can do without such as entertainment.
- Have a savings goal
One of the main reasons why people save is to achieve a certain goal in their lives. Start by thinking about something that you would like to buy in future such as a house or a car. In addition, it’s much easier to save when you know the period you are supposed to save for it.
- Set your priorities
As much as you would like to save money for your short terms goals, don’t do it at the expense of the long term goals such as retirement. In fact, you should save more to meet your short term and long term goals.
- Pick the right tools
Nowadays, savings are mainly done in banks and you should know the type of account to use for your savings plan. Some of the accounts include; regular savings accounts, fixed deposit accounts etc.
- Automatic saving
Most banks have made it possible to transfer money between checking and savings accounts. Therefore, it’s easy to monitor your savings and you don’t have to worry about being tempted to spend the money since it’s not in your pocket.