Over time, saving has become one of the rarely disputed financial advice given to many.
Familiarising yourself with useful saving tips is a good way to tackle this issue.
Not only does saving serve as bailout funds during cash trap days, but it also boosts confidence and improves the purpose of living.
While saving involves setting aside funds for future use or unforeseen circumstances, it is not as easy as it seems, as many find it difficult to be
In a research report released by Northwestern Mutual, 20% of Americans have no retirement savings, while 45% are not prepared for the possibility of outliving their retirement savings.
Despite these statistics, the number of savers and that of smart savers is still higher than non-savers. While savers save for the days ahead, smart savers invest their savings.
Rather than take the risk of low/high returns on investment, savers prefer to keep their money in a lock without the fear of loss.
No doubt, investing generally involves some risks, but careful investment is more profitable than total savings.
Usually, a safe and legitimate investment scheme, which includes bonds, stocks, and real estate, yields reasonable profit while unsafe ones like Ponzi schemes, which promises high returns yield either high profit or total loss for investors.
Irrespective of your decision to be an ordinary saver or a smart saver, you are surely saving towards the future.
The savings rate in the United States in 2019 amounted to 7.8%, with a total of 1.3 trillion.
With an increase in needs and wants, people are now aware that they need to start spending less and saving more.
It is important to know that there is a little difference between SAVING and SAVINGS.
Saving – Refers to the act of not consuming ones asset.
Savings – Refers to the involvement in multiple opportunities to reduce the use of cash.
Although saving can be quite difficult, keeping these three types of savings plans will surely save the day. The plans include;
Emergency Savings Plan
Retirement Savings Plan
Personal Savings Plan
Emergency Savings Plan – This savings plan involves setting aside funds to cater to long term illness, the sudden death of a partner, little repairs at home, job loss, and other unforeseen circumstances. It also involves funds kept aside to cover unexpected financial challenges.
Retirement Savings Plan – This savings plan involves a gradual reduction of money from your income while being in active service. The deducted funds are saved for use after years of active service.
Personal Savings Plan – This savings plan involves any kind of payment you receive – whether earned at active service or unearned. It also includes pensions, wages, social security
benefits, and retirement benefits.
Here are the various methods of saving money;
Lets look at some savings tips we can adopt daily and throughout the year:
1. Focus on daily needs
2. Embrace social distancing
3. Check the internet on tips and advice
4. Invest 50% of your income
5. Acquire knowledge on how to set aside income for future use
6. Employ 4 – 6 – 12 rules
7. Ask advice from a colleague or friend that has a good saving plan
8. Convert some saved money for profitable investments.
9. Convert passion or talents to money
10. Do house chores yourself
11. Keep track of your daily expenses
12. Do not set money limitations in your brain
13. Register with an organization that offers money savings tips
14. Use your mind as motivation to surpass your savings goal
15. Take a trip to where you will save money
1. Focus on Daily Needs: By focusing on our daily needs, we unconsciously avoid spending more than is required of us.
Take, for instance, you went all out to get foodstuffs you won’t need in the next three months.
After paying for all the foodstuffs, a friend or a family member pops up to drop the excess foodstuffs they bought. At that moment, you begin to wonder how much you could have saved if you hadn’t gotten extra food items.
To avoid this, it’s best to resist the urge to overbuy daily needs. Save more money by buying at a go rather than buying in bulk.
2. Embrace social distancing. The recent pandemic that hit the world has given everyone a valid reason always to practice social distancing.
Observing social distancing helps you save as you wouldn’t need to go for that casual outing, eat a random meal, or spend money on purchasing new items.
3. Check the internet on tips and advice: The internet has made things easier for everyone. There is hardly anything you won’t find on the internet.
With daily uploads of new content, you can constantly update yourself with new tips on how to save money wisely and diversify your asset portfolio to incorporate good investment plans.
4. Invest 50% of your income: You can easily achieve your savings goal by eradicating cravings of buying unwanted items from your income.
To know the number of unwanted things you have bought, take an inventory of your wardrobe. You would easily spot clothes, shoes, trinkets, bags, and some unwanted items lying in your wardrobe or closet for years.
While you may try to sell items that have not gone out of fashion, you will most likely donate others. Any of these can be avoided if you restrain from buying everything that comes your way.
5. Acquire knowledge on how to set aside income for future use: Several finance budgeting organizations provide expert services on how to cut down expenses and set funds aside for savings.
Get in contact with any of these organizations to start a long term investment plan. As a saver, not only do you save to secure your future, but you also contribute positively to the country’s economy.
6. Target savings goal every quarter, six months or annually; 4 – 6 – 12 rules: Savings target for a month might not be enough to invest in something worthwhile. So I devised 4 – 6 – 12 rules, where four (4) stands for four months savings, 6 for six months’ salary, and 12 for 12 months salary.
This plan will allow you to re-invest your accumulated 4 – 6 – 12 months salary to acquire more money or start some profitable projects.
I have conveniently used my six months accrued savings for a property down payment, and I have also used accumulated savings to further service the continuity of the payment.
Repeat this process and start forming savings habits unconsciously.
7. Ask advice from a colleague or friend that has a good saving plan: No doubt, some of your friends and family are quite efficient in managing their money effectively.
Some of them have set financial milestones, and they have diligently met and surpassed it.
They can also be your source of strength during our financial mishaps. Since they must have gone through financial troubles that led them to discover financial freedom, they are undoubtedly some of the best people to help you.
Carefully access the financial state of those closest to you, identify the ones with a good financial rating, and talk to them about whatever it is you might be going through.
You never can tell, help might be around the corner.
8. Convert some saved money for profitable investments. I will confidently refer us to Robert’s book – Rich dad, poor dad. In case you have been setting some money aside for your kids college fund or property down payment, you need to read the book.
Rather than keep saving, you can confidently convert your funds to another source of income-generating assets.
9. Convert your passion or talents to money: Being allowed to convert your passion or talent into money is like doing what you love and distribute freely to earn some cash.
Think about saving the money you gained from the service you rendered into a savings account.
10. Do house chores yourself. This act is another form of great exercise; it is also a great means to reduce your spending. Rather than employ someones service, clear your clutter with love and smile and clean your environment without feeling awful.
Be sure to repeat this twice a week to get used to it. You can also save money by fixing some exercise equipment around the house rather than pay for a gym membership fee. Related: How to save and increase your savings.
11. Keep track of your daily expenses; from monthly – quarterly –
yearly: Tracking your expenses breathe in some level of freedom and helps you to maintain a healthy financial life.
As long as you keep track of spending, you will keep experiencing financial freedom and ultimately overcome the fear of debt.
12. Avoid setting money-making limitations in your brain: Do you wish to start saving and boosting your self-confidence to overcome your fear of debt completely?
Then you need to stop thinking about money limitations and give your thought processes another chance to think about financial abundance. When you start processing a positive thought, ideas of a profitable savings goal will begin to pop in.
13. Register with an organization that offers money-saving tips ideas. Lots of organizations offer excellent tips about the management of funds.
These organizations have vast experience with people that have struggled with their finance and found a way to overcome their overspending habits.
They have also taken their time to document success stories of people with financial challenges and how they conquered these challenges. So register with one to get all the tips required for effective savings.
14. Use your mind as motivation to surpass your saving goals: Our greatest asset in life is our mind. Visualize the benefits of savings in life, dream about what you stand to achieve with your savings, feel it, smell it, and act upon it. Learn to endure a little bit to enjoy later.
15. Take a trip to where you are going to save money: Once in a while, you can visit places that do not strain your finances. Start expanding your assets portfolio as soon as possible; write your goals in a notebook and read them out to yourself daily.
Be determined to follow through your savings plan by downloading mobile financial apps to budget your expenses.
Your savings goal can be actualized when you start designing powerful and achievable definite goals.
Put your goals into writing by planning how much money you wish to acquire, when you intend to reach your goals and the strategy you want to use in achieving them.
Saving may not be easy, but consistency and determination will give you life-long financial freedom.
If you find these tips helpful, share with friends and family.