Stop searching; instead apply what you have already learned
We heard how to save. We knew how. The answer on how to save is everywhere. But people are not practicing what they knew. People kept on searching, trying to discover new ideas on ways to save money. People wanted to save fast. They wanted to take the short cut and the result is failure.
Your dreams should be bigger than the obstacles
Saving money isn’t easy and hindrances are everywhere. Like other goals in life it takes self discipline to achieve it. It is not how you do it but why you are doing it. More than the steps it is important to always bear in mind your reasons why. When you feel like you’re losing the battle, bear in mind this quote “Before you quit remember why you even started.”
Realize the real reason why you want to save
Why are you saving?
Saying good future for your family is very generic. Make it personal and deep. Try thinking of your dream house. Or try putting yourself in a scenario where your child is asking you if he can enroll in a medical school because he wanted to be a doctor. You know how expensive it can be right? Do you think you can say yes or you will just take his dream away and give him other options? You know a course that will not force you to work too much.
Other way of determining your reasons why is think of an event in your life, Or something that happens to you always that you hate. Say borrowing money from a friend because you are short of budget, losing your house because of mortgage payment.
So what now? You know what savings is. You know how to save. You are ready for obstacles and challenges. You have your reasons why, you are so ready and excited to save. Before we go to actions I also want you to always remember this word “Consistency” let me use a phrase of Kristine Kane “Consistent Action Creates Consistent Result” You don’t need too many steps. You just have to be consistent and these three steps.
- Pay yourself first / Save before Spend
Every time you receive your pay, put aside a certain amount for your saving right away before spending. Saving comes first before debt, expenses, and fun. Open a separate account that automatically transfers your savings from your payroll account. In that way it is already saved even before you can touch your pay. If you cannot open an account, have a coin bank, envelope or a wallet separate in the one you use for daily expenses. It should only be used for saving purposes only. Do not be tempted to touch the savings if you are short of money because it will be a habit. If you dig in your small savings to pay a debt you will most likely to do it always and you will end up with no savings? Bear in mind that the more you struggle today the more reason you have to save and more reasons why you should not touch your savings. Remember, that saving money today will save you big time in the long run.
- By heart how much money are coming in and out of your pocket by creating a budget. (Know your budget)
If you will be asked how much you spent with food last month? Would you be able to give an answer in a second? If not, you are one of the many who just spend their hard earned money without a budget. It is impossible to save if you don’t understand your cash flow. You need to have a budget. Believe me it is easy as ABC. You will need a pen and a paper. You can use an app to do your budget. If you are a beginner pen and paper is recommended. If you are short of money in your budget cut the food or the fun but never the savings.
- List down all your expenses
- Set a realistic amount for each category
- Follow the budget
This is the hardest part and so personal why’s comes in. How to stick to the budget you created? First let me ask you. “Did you set a realistic amount in your budget?” If not then you will have a hard time following your budget. Your budget is not a wish budget but something you are going to follow every single day. Most people are actually short of funds for each category to stand last until the next pay so what to do if you are short. Well do not touch the savings that you put aside first. No. No. You borrow money, reduce expenses or earn extra. You choose. If you are going to borrow money, payment for it will be added to your expenses the following month. But hey, extra payment won’t help. We want to save fast, Reducing expenses will do. You can cut the food expense or slash the movie night. But instead of dividing your pizza to small bits, Why not have a bigger size? Why not earn extra to cover your shortfall.
- Earn extra
Earning extra could help you a lot. Imagine having a spare amount to cover your short fall. It is like having a friend lending you some money, but this time it is your own extra dollars. It will also help you not to use your savings. Just be careful not to indulge yourself too much once you have your extra pay. You can earn extra by doing extra hours at work. You can use your talent, Say you can maybe write, tutor, cook or draw. It is maybe the time to discover your hidden skills so you can make money out of it. You can also sell some valuable stuff that you do not use anymore.