Perhaps, you are among millions seeking financial stability. Almost every individual recognizes the importance of saving, but few can do it religiously. Developing and maintaining discipline in your savings is fundamental in attaining financial stability. When it comes to money, there are easy rules that can help you save money and become more financially stable regardless of your income or financial situation.
While spending is natural, saving isn’t, making it difficult for most people to save. Therefore, it is a practice that we must learn and work at to make it part of our lives. This requires conscious effort and awareness to make it a habit. Let me take you through 8 golden rules that you can apply to develop saving discipline.
Know-How Much You Earn
How much do you make? Probably this is a question that may sound rude to some. However, it is a critical question that you must ask yourself if you want to plan for your finances. You must know how much you earn daily, weekly, or monthly to budget your savings and expenditures. With an actual income figure, you can easily determine what portion of your income will go to your savings and other things.
Budget for Your Income
Budgeting for your income is vital if you want to develop saving discipline. Budgeting is simply creating a spending plan for your income. It helps you to have enough money for all your needs and meet all demands that are important to you. Budgeting for every coin that comes to your hand will help you avoid common saving pitfalls such as unnecessary spending and debts. Your budget should always remain within your income.
Do you spend then save? Perhaps this is one of the reasons why you are finding it challenging to save consistently. Wants demanding your financial attention will always be there, and it is impossible to satisfy them all at once. Therefore, you should always prioritize your future by paying yourself first. The rest of your financial obligations should follow. Doing this helps you develop a saving habit.
Make Sure You Save Something
I am aware of the numerous saving plans available that outline how much or what percentage of your income should go to savings, expenditures, and other things. While these plans are helpful, I advise you to start where you are. It might not be possible for you to save 10% or 20% of your income, but you can at least manage to set aside a few dollars for a rainy day. Eventually, you can increase your savings with time as your financial obligations ease or as your income grows.
Do Not Procrastinate
Talking about procrastination, Napoleon Hill said, “Procrastination is the bad habit of putting off until the day after tomorrow what should have been done the day before yesterday.” There is no better day to start saving than today; thus, don’t allow anything to hinder you from creating your savings plan. Unfortunately, many people realize the importance of savings when emergency strikes, and they have nothing at hand to offset it. Do yourself a favor and start saving sooner rather than later.
Automate Your Savings
Do you remember the “save first” golden rule outlined above? Automating your savings is the best way to make it effective. Most banks provide automated transfers between your deposit and savings accounts. Automated saving enables you to decide where to allocate or split your deposits such that a certain amount in every paycheck is directly deposited into your savings account.
Automating your money transfers ensures that you make your savings effortlessly without thinking about it. Also, it keeps you away from the temptation to spend money instead of saving.
Determine Your Saving Goals
Financial goals refer to the precise plans you make for your finances. These goals are unique to your financial situation and provide you with specific targets. Setting saving goals helps you have a clear picture of the expected economic outcomes, thus allowing you to save consistently. Without saving plans, you will not have any motivation to save, and it will be difficult for you to develop saving discipline.
Your saving goals must be specific, measurable, achievable, and time-based. Additionally, they should be relevant, meaningful, and affiliated with your values.
You will be required to create short-term, mid-term, and long-term saving goals to remain focused on your financial goals.
Short-term saving goals can range from 1-3 years and may include goals such as a vacation, emergency fund, or car purchase. On the other hand, long-term saving goals run for more than 4 years. Such goals include your child’s education, retirement, or buying a home.
Track Your Spending and Find Ways you Can Cut it
Understanding your spending patterns is a critical step in attaining any financial goal. Once you become aware of how much you spend and what you spend your money on creates a foundation for an effective financial plan. If your expenses are too high, then you might not be in a position to save as much as you would like. As a result, you may be required to cut your expenses over time.
You start by pinpointing less essential things you spend your money on, such as entertainment and travel or dining out. Also, check on other fixed monthly expenses that can be reduced, including cell phone and television subscriptions.
The following are some ideas that can help you reduce your routine expenses:
- Stick to your shopping list to avoid impulse buying.
- Use cheaper travel alternatives e.g. cycling, walking, or use public transport.
- Minimize your energy consumption by turning off lights, using less heat or air conditioning, and unplugging electronics that are not in use.
- Cook your meals. Avoid frequent visits to restaurants for meals.
- Clear your bills on time. This will help you avoid unnecessary penalties, fees, or interest for late payment.
- Consider buying a home instead of renting.
- Take advantage of the cheapest modes of payment when purchasing commodities.
Cutting down your expenses will help you have more money and eventually develop saving discipline in you.
All in all saving discipline comes from deliberate and consistent efforts to set something aside for the future. You don’t have to wait until you start earning a five or six-figure income for you to begin saving. Start saving whatever little you can manage now, and in the days to come, you will celebrate this wise decision. Developing saving discipline is the key to achieving your desired financial goals.
About the Author
John Kungu has been a freelance writer since 2017. As writer, he is interested in a wide range of
fields from personal finance, crypto currencies, online marketing, and personal entrepreneurship. He has
experience handling numerous writing orders and is fully aware of the significance of writing clearly and
concisely. When not writing you will find John reading. Follow John on Facebook: