We all know it’s better said than done to “save for your future” or even a rainy day. With all the bills, emergencies and debts that need to be settled that come up day in and day out, the once “savings” become your go to when trying to settle your money issues. Truth be told, there is so much to be said about the benefits to saving that we don’t have the span of time, but I have come up with the most pertinent as to the best practices of saving.
Stick to a budget
Cannot stress this enough. Sticking to a budget will help you in so many ways. In this day and age, unless you are making money in your sleep, you need to budget in order to have your bills covered and also have disposable income for leisure and whatever else comes up.
Track Your Expenses
Similar to having a budget, tracking your expenses is also important as it ties into knowing where your money goes and how much of it is being spent doing what. Millennials like to use mobile applications on their phones to make it easier for them to see their spending habits. The ease at which the data is tabulated allows them to further understand that they might need to minimize their leisurely activities or save more.
Automate your savings
Doing this helps in many ways, not only are you able to save a fixed amount per month or year, but you foster discipline and you really can’t spend that chunk of money if your reserve decides to run out. Banks and financial institutions offer fixed deposits that you can benefit from, so make use of it and invest in yourself.
Know your personal finances
Gone are the days where you have to pay someone to do your finances for you because banks allow persons to access their finances in seconds. However, this doesn’t mean that you should not do some research as to your personal finances as this will help you understand where your money is going without just spending without a plan. From asking the right questions to a financial advisor to looking up what you want to know online or reading books geared towards finances, knowledge is so widely accessible.
Make a contingency Plan For Emergencies
It seems like the more you earn the more you have to spend or the more things that come up where you have to spend. Same holds true for emergencies. While they say ‘save for a rainy day’ those days may come up sooner than you think. Instead of using your disposable income or your salary and you are left with nothing, try putting a part of your salary away so that you can use it if the time comes that you experience a dire emergency.
Set a timeline for your financial goals
Maybe not everyone likes to do this, but it is a best practice to set a timeline so that you can track your progress over the period and if you don’t quite achieve it in the time frame, you can see where you fell short. Most times if you don’t allocate money (quantifying) to the goal then you might use it in other places and that in turn robs your goal of being accomplished.
Don’t wait to pay your student loans
Pay back the student loans as quickly as possible. Don’t let it pile up to where you’re wondering if you are going to have to sell your just purchased car (on loan) or if you have to start calling those creditors for help. Also, it will help to automate your repayments so you get into the habit of paying back a certain amount weekly, monthly, or even quarterly.
Spend on expenses and not material things
Admit it, it’s easy to spend on material things, who doesn’t like nice things? It not only shows your earning potential, but you look good wearing the latest trend. However, how beneficial is that when sometime down the line you fall short of your saving goal or you aren’t able to pay down on your dream car or house? Spend smart ladies and gentlemen. Don’t fall prey to the fads of the world, in the long run, you will be wishing you hadn’t.
Worthwhile investments, no matter how small are always good long term
Investing in stock, businesses, bonds, real estate or whatever your heart’s desire is seemingly the way to go on the financial stage. No longer are persons saving money under their mattress or in their bank account, but they are allowing it to work for them through wise and strategic investments. Also, investing in your knowledge, health, skillset, and your overall self is something that should not be ignored as it will benefit you long term. Make sure you set aside funds to invest in you because if you don’t take care of body, mind, and spirit, those three won’t take care of you.
Plan for retirement
It is never too late to start planning for retirement and your pension cannot do it alone my friend. I know it’s been stressed a lot to save for different things, but trust me, you don’t have to save any large amounts of money in any one thing when your salary is dispensed. Try to split your savings into different parts and put that to each category you have under-saving – this method will accumulate over time.
By Alexandra Daley