Five Effective Tips To Become A Better Saver
Achieving financial freedom is just about everybody’s dream. However, many people hamper their dreams by not saving enough or not saving at all. Below are 5 tips that are guaranteed to make one a better saver;
- Start as Early as Possible
“Investing is foregoing consumption now in order to have the ability to consume more at a later date” — Warren Buffet
Saving is a habit. And just like any other habit, it takes time to develop. Saving requires consistency and you must put money away as much as possible. Starting out early gives you an advantage as you get to develop the habit and it literally becomes part of you. One of the most common mistakes that people make is thinking that they will start it at a certain point in future or when they achieve a particular financial milestone. However, that kind of thinking can be problematic because growing older means more responsibilities from kids, car, mortgage, and an endless list of bills to settle. Starting out early will help you figure out ways of putting something aside even and ingrain in you a culture of saving.
2. Even the Smallest Effort Counts
Another common misconception about saving is the belief that there are particular amounts that are not worth saving. The truth is that no amount is too insignificant to save. In fact, the small amounts eventually add up to something significant. Do not shy away from saving the small amounts because doing so consistently will result in something great. The goal is to start and then keep going from there. You have to remember that even the smallest effort counts as it brings you a step closer to your goal.
3. Save First, Spend Later
Once that check comes in, save first and then proceed to spend. This requires a lot of discipline given that you are likely to have a lot of different bills that you have to take care of. One effective way to do this is to set up automatic deposits into your saving account. This might make it necessary to have a savings account different from your checking account. Suze Orman refers to this as the set it and forget it approach which guarantees that you can achieve your savings goals while eliminating the risk of spending everything and forgetting to save.
4. Make a Budget
A budget is not only useful when it comes to spending but also for saving. Sticking to the spending plans will guarantee that one has something to save. It is worth remembering that your ability to save depends on how you spend your money. Knowing how much you spend on your everyday needs is important when planning on your saving. Therefore, ensure that you budget your earnings and stick to the spending plans to support your savings culture.
5. Save with a Goal in Mind
Don’t just save for the sake; have an objective for doing so. You could be saving to put down a payment for a car or a house. It could even be for that holiday that you have wanted for a long time. Having a goal in mind from the beginning will help you develop the necessary discipline and make it easier for you to save. In any case, saving towards a predetermined goal and then achieving it will only spur you to do even more and you develop a habit over time. Saving without a goal can be dangerous as you could easily be tempted to spend simply because the money is available. Therefore, always ensure that you have clear goals towards which you are saving.
Financial freedom may seem like a pipe dream but being a better saver makes it an achievable reality. So go ahead, start saving now, save no matter how little it may seem, budget, and you will be making a major leap towards securing your financial future.