Saving money is not as difficult as it seems as long as you have a little discipline followed by planning. The famous quote by Benjamin Franklin “a penny saved is a penny earned” still rings true today. The following are some of the most tested ways to keep the piggy bank full.
Have a Budget
First, you need to know how much money you’re spending each month. Based on this you will have a clear idea regarding how much you can put aside each month. A budget is basically an amount of money that is set aside for expenses. The simplest thing to do is to minus the budget from the monthly income. Whatever is the remainder, you can put aside for saving.
Keeping Track
This perhaps the most ignored part of a savings plan. And that would be keeping track of all expenses. Because of the tediousness associated with it, it is the least popular part of any savings plan. But keeping track of expenses is second only to having a budget as far as importance is concerned. It is the only true way to figure out what exactly is the monthly expense. And everything from car payments, to the coffee you buy on the way to work needs to be noted. The easiest way to do this is to use credit/debit cards as much as possible. This way it can all be printed on one statement, making it much easier to go through with a fine-toothed comb.
Set Goals
A great way to get motivated is to set goals. Make a list of priorities. Or if you haven’t bought it yet then think of something that you would like to have in the near future. This could be anything from purchasing a house to going on that cruise vacation you have been dreaming about. Once you have figured out what you want, start making plans on saving for it. There are calculators online, such as the one available on moneybanker.com, that can help out with savings goals. Generally, anything that will take one to three years to accomplish is considered to be short term goal, and anything more than that will be long term.
Priorities
So you have set goals, kept track of expenses, worked out a budget, now it’s time to set priorities. Because until you have done the previous steps, you will not have a clear picture what purchases you are capable of making. The ultimate goal of prioritizing is to help decide what exactly you need to save money for. This is when you get into actual numbers. Because all savings plans need a reality check.
Automatic Savings
Most banks will give customers the option of transferring money from checking to savings accounts. Why is this seemingly small thing important? The answer is simple. It will save you from using the money someplace else. Being tempted to spend the money elsewhere, is one of the biggest obstacles that stop people from saving money.
