It is hard sometimes to get started in saving money and it can be also difficult to find ways to put money aside and you use them later on to attain certain financial goals. Through this guide you will learn how to make a realistic saving plan
1. List your expenses
At first you need to know how much you are spending in order to save money. Write down everything you spend for a month. Include every chocolate bar, and every coffee you bought throughout the entire month. Once the list is complete organize the numbers by category – for example: gas, electricity, food, and so on – and calculate the total amount of every single one.
2. Set the cost
After knowing how much money you spend in a month, you can put a plan for your spending, cut down from over spending and make sure to save money for emergencies aside. You should always include the expenses that are unexpected, like car maintenance checkups.
3. Plan to save money
Compare your monthly income with your expenses and take 10 to 15 percent out of your net income to save it. If you have too much expenses during the month and you can’t save that much so it’s time to cut back. Check what are the things that you can spend less on such as dining out, shopping before considering cutting down from the expenses spent on your essentials such as your car or your dentist.
4. Set goals for saving
It becomes a lot easier to start saving when you set a goal. Put a time frame for this goal to be achieved. The short-terms goals which usually take between 1 to 3 years include:
- Prepare an emergency fund which will be used in case you quit your job or other emergencies and make sure it covers from 6 months to a year of living expenses.
- Save money to travel
- Save money to buy a new car
Long-term savings goals are usually achieved after several years or decades and include:
- Save money for your retirement project
- Save money for your next degree
- Save money for a down payment on a house or to remodel your current home
5. Set your priorities
Not all of us have the same priorities when we have to save money, so it’s easier for you to decide what is more important in order to think of savings. The important thing is to decide how much you are willing to wait to achieve your goal and how much money you can save each month. Prioritize your goals and save money accordingly from your monthly budget.
6. Adopt Automatic Transfers to Save More
You can transfer money from your checking account into a saving account and this is much easier than any other technique. You have many options when you use the automatic transfer. You choose when you want to transfer money and through which accounts. You can even divide your sum of money between your checking and savings account. When saving becomes a regular expense you stay on the right track leading you towards achieving your goals.
7. Check Your Progress
Every month evaluate your progress. When you see a progress you will become more dedicated to your plan and you will also be able to solve any issues on the spot. With these tips, you will be excited to save more and achieve your goals faster.