The hardest step in saving your money or curbing your costs is getting a starter. Nevertheless, the process doesn’t get easier even when you have started on the path of saving. It requires perseverance and constant vigilance. In case you are wondering how to get started and save money and budget your finances, read on because we have some pointers for you.
#1: Recording Expenses
The first step of figuring out if you have saved money is to check the total and subtract the expenses from that. In order to do that, you’d need to record your expenses first. So, keep track of all your expenses. Anything that you buy daily, like your coffee or a packet of biscuits should also be included in that. Once you have collected all the expenses, sort them out, and then add them. And then you can also see for yourself, where you are spending your money.
#2: Have A Budget
If you have an idea of your monthly spend, you can also plan your budget. It is just an idea of how much you are planning to spend and where you can spend your money. Remember that the budget that you are making should outline your expenses with respect to your income. Don’t overdo it. The budget is there to help you see where you are spending your money, and how you are doing it.
#3: Plan for Saving
Instead of planning for buying something, plan for saving something. In the budget of yours create a category for saving and plan that out too. Always try to put away at least 10% of your earnings in the savings category. Yes, you might not need all you save in your daily life, but in case of an emergency, you’d be able to fall back on your savings, without asking anyone else for help. Isn’t that great? A good way to save money is to consider it as a regular expanse. Just like you do grocery shopping regularly, you should also save regularly.
#4: Choose A Reason to Save
If you have a reason to save, then it becomes easy. Also, when you have a fixed goal and some actionable steps, you might find it easy to save some part of your income. So, start by thinking of something good and positive like maybe a vacation or down payment for a house. Then you need to figure out how much you need to save and for how long in order to have that house or vacation.
You can also choose some short-term or long-term goals. For example, some of the short-term goals might be
- Down payment for a car
- Emergency fund
Your long-term goals can be something like
- Your child’s education
- Down payment for a house or an apartment or condo
- Your retirement plan
- Health plan
You can also invest in some of the systematic investment plans. However, you should remember that not all systematic investment plans bring in money. Some can also cost you some extra.
#5: Decide Your Priorities
As you might know, your priorities decide your course of action. So, when you are trying to curb your spendthrift behavior, remember your long term goals and how and why they are important. If you prioritize your goals, you can have a clear picture of where and how you should start saving. For example, if you know that you need to replace your car, you would start putting away money for a new one, and that would be prioritizing your goals.
#6: Pick Right Tools
When you are trying to save money, you need to pick the right tools to help you do so. If you are considering short-term goals, you can consider the following for saving
- Savings account
- Certificate of deposit
For long-term goals, you can consider the following
- Individual retirement accounts, which are insured by FDIC
- Mutual funds
- Stock market investments
Now that you know about tips for saving your money, it is time to get started. You can also automate your savings, in which, a certain amount is auto deducted from your checking account and stored somewhere else. It can also act as an emergency fund for you. In case you don’t have enough saved for your long term or short term goals and need some hard money loans, you can read more here.