Saving money is one of the best habits I’ve learned to take control of my finances.
And with a brand new business, saving has become a major priority now.
But I’ve never been keen on saving money seriously.
I mean I love spending my money, but after being broke for a while my spending habits have completely improved.
I’ve had to adopt new habits without being overly frugal to reach my goals.
And from what I’ve learned so far it all starts with a good savings plan.
But you shouldn’t have to cut back on buying coffee, doing your own hair, or resort to dumpster diving.
Unless that is something you are interested in doing, then that’s cool.
But that’s not what this post is about.
This post is about starting where you are with your money.
If you have no idea where to start, I recommend reading Ramit Sethi’s book, he teaches how to not only manage your money but also how to maximize your earning potential.
Let’s look at some of the benefits of saving money regularly.
Benefit 1: Mentally freeing
Imagine the feeling of knowing that you have money in the bank that covers you for at least 6 months.
How awesome is that?
Not worrying about money at all or even just for a little bit is amazing.
Being able to afford groceries or even the occasional join your friends for a spontaneous night out.
Having some money saved up gives you a certain level of comfort which is awesome.
Benefit 2: Emergencies don’t catch you off guard
An unwelcome crisis is terrible especially when you least expect it. And when you have no money at all, it’s crushing.
Things like unexpected sickness or even job loss can possibly get you into unplanned loans which is something you don’t want.
Savings are like your safety net, it’s impossible to know what life has in store but you can always be prepared for what may come.
Benefit 4: Funds a project
Whether that’s buying a house, building up your investment portfolio or even starting a business with hard cash is a dream.
At a glance, the total amount always seems an impossible amount to come up with.
But these small steps done month by month can increase your chances of buying that house you’ve always wanted, taking that trip you’ve been planning for years and so much more.
Benefit 5: Limits debts
This is one of my favorites because I don’t like owing people money.
It always feels like a weight on my shoulders.
And the joy of making new money is always short-lived as you have to part with some or most of it to clear that debt even faster.
With savings, this can be avoided. If you need the money, you can just visit your bank and make a withdrawal.
Benefit 6: Finance your education
Whether that’s going back to university or taking online courses or whatever form of education you are interested in, the money you have saved opens up a lot of opportunities towards your self-development.
Benefit 7: Creates discipline
The first few months of saving money and not spending it will be a bit hard at first, but as you go along, you will get more used to it. The urge to make a withdrawal will diminish over time.
Everything listed here is from personal experience and what I have learned so far. So feel free to test out what works for you and take it from there.
Remember, the goal is to actually get started.
1. Create a savings goal
I love planning ahead.
So naturally, when I thought of saving money, I needed an end goal to keep in mind.
Having everything mapped out helps me stay focused.
Here’s what I did to create mine;
- I got a notebook and carried it around to track my expenses.
- After a month, I evaluated everything to find out what I spend the most money on.
- Most of my money was being spent on impulsive buying.
- So I moved to the next step, creating a budget.
- Then came the savings target.
To be able to have a savings goal, you should first know how much you spend.
I’ve had to make a ton of cutbacks on some unnecessary things.
Tip: Before doing anything else, first find out how and where you spend most of your money. Carry around a notebook if needed.
Keep all your receipts and don’t restrict yourself.
Spend as you normally would, this will give you better clarity when it’s time to crunch the numbers.
2. Divide and conquer
This is one of the best things I have learned so far.
When it comes to saving money effectively, understand your money serves different purposes.
So basically the idea is to come up with a few projects you want to accomplish.
And start knocking out two at a time.
Here’s what I did;
- I started two bank accounts, a savings account, and investment accounts.
- Every month, I split the money I save into two and put it in these two accounts.
For you, the goal may be different.
Maybe you just want to save for retirement and money for travel.
And the great thing is you can also do this with any debt you have.
Good thing, this works great as well!
And there’s no limit to the amount of bank accounts you can create, you can have as many as needed and split your money for each.
3. Make saving automatic
This is a new habit I’ve started practicing to get better at saving money.
I’ve made saving automatic.
Like clockwork, my savings target is automatically sent to my bank account.
What I did;
- I opened a fixed bank account and limited my withdrawals to two times a year
- Asked a friend to keep me accountable
- I’ve made it a must-do, whether I’m having a good month or not.
4. Create a budget
Create a budget that you can stick to.
I’m no expert in creating budgets and neither should you be. I approach budget-making simply.
I list out the basics that I must see to like rent, food, and transportation. Sum them up and remove that amount from the money I make each month.
The aim is to keep it as simple as possible for you to get started quickly.
5. Enjoy restaurant-worthy Food
I love eating out and I tend to do it a little too much.
But lately, I’ve been really watchful with my money, I’ve been making some changes like making restaurant-worthy food at home instead.
With YouTube in hand, I’m now able to make some awesome meals at home that I normally would order online.
I’ve learned to replicate my favorite dishes which means less eating out and more money in my bank.
6. Cancel memberships
I have this terrible habit of subscribing to something and then forgetting all about it.
And with all these money changes I’m adopting, I’m going through my bank statements every month.
I suggest you take some time and going through your bank statements and see what you are being charged for.
Chances are, you will find one or two to cancel.
7. Meal plan
I’m a transitioning vegan and one thing that’s been saving me a few bucks is meal planning.
I plan my meals ahead of time because if I don’t, I always end up giving in to unplanned cravings.
The key here is to plan ahead. It doesn’t mean you have to eat the same thing every day. It just helps to have a general idea of what your meals are gonna look like throughout the week.
Bottom line is, with money you gotta have a plan. Especially if you have plans of making your future better. Personally, it means being able to escape the corporate world and seeing the world. What is it for you?
Be sure to let me know in the comment section and if you have a tip that needs to be included share it and I’ll consider adding it in.