Learning how to start saving money is important. With so many bills to pay how can you possibly set some aside for your wages?
You don’t have to dive right into saving thousands of dollars.
Follow these simples steps to learn how to budget and save money.
Learn How To Start Saving Money Now
Step 1: Set A Savings Goal
Before learning how to start saving money, you will need to know what you are saving for. You can set up goals for a long-term or short-term plan. It is important for you to know how much money you need to save as well as what steps to take to achieve such goals.
For short-term goals, you usually need the money in 3 years or less.
Saving for the down payment of a car, going a vacation, or even buying a new phone or gadget are all considered short-term goals.
On the other hand, long-term goals are utilized several years into the future. Some examples are retirement funds, educational plans for your kids, and building or buying a house on mortgage.
Step 2: Set Up Your Savings Tools
Now that you have established what you are saving for, you will have to establish the tools to help you with your effort.
If you want to start small, you can use a piggy bank, where you can save your loose coins and small bills. Aside from piggy banks, you can also deposit your money into a savings account. In fact, you can open several accounts for each goal you have.
Long-term savings and investments require you to deposit a certain amount that you can’t withdraw or use for a fixed number of years. This kind of savings account may be used for a trust fund or retirement plan.
Step 3: Make a Budget
With your goals and tools all set, you now need to start planning how to start saving using the money or income you currently have.
You will need to establish your expenses on a monthly and yearly basis. This would include your household bills (electric, Internet, and water bills), food expenses, travel costs, and credit card bills.
Then, using your regular net income as the basis, you can create your budget.
Step 4: Keep a Record of Your Expenses
Have you ever wondered where your money goes to after receiving your paycheck? If you are not keeping track of your expenses, you won’t be able to know how much you’re actually spending on clothes, gas, or even on food.
Keep a journal of your expenses, updating it on a daily basis. There are a lot of apps you can download if you prefer to manage your expenses and savings on your phone or tablet.
Keep receipts and write them down in your journal by the end of the day. This way, you will be able to know how much you spent that day.
Step 5: How To Start Saving Money By Prioritizing
If you have your list of expenses already, it’s time to sit down and decide which bills need to be prioritized. It’s important to keep track of loans or bills with higher interest rates. That way you won’t have to be burdened with a blown up bill when the due date arrives.
Although you can consult with a debt lawyer for overwhelming bills, you won’t have to if you prioritize well and save up your money.
Step 6: Cut Unnecessary Expenses
Aside from prioritizing your bills, cutting unnecessary expenses can help you save more.
For example, you can limit the times you eat out from every other day to just once a week. You’ll be surprised at how much you’ll get to save if you switch your Starbucks latte with a homemade brew.
Being able to pay your credit card bills, mortgage, or loans on time will also help you save a lot. Instead of using all of your hard-earned money on paying interests for delayed bills, you save it up instead.
Step 7: Don’t Sweat the Small Bills
When you decide to start saving, you might think that you need to save up hundreds of dollars right away. That’s not necessarily the right move.
If you are saving for a long-term goal, setting aside a few dollars at a time will go a long way.
Start with $10. Deposit it into your savings account when you get your pay. You can increase that depending on your net income. You might not think much of it, but after a year or two, that $10 will grow to a few hundred dollars at least.
Step 8: Look for Sound Investment Opportunities
If you have some money tucked away already, try looking for investment opportunities that can help you in the long run.
Invest in your pension. By the time you decide to retire, you will have enough savings to go on vacations and not worry about your future.
You can also invest in real estate, bonds, or stocks. Then again, you have to remember that investments with bigger returns also carry great risks.
Be reminded, though, that investing is different from saving.
Step 9: Check Your Progress
So you have learned how to start saving your money, you should not stop with that. Check your saving’s progress regularly.
By being updated on your progress, you will be able to identify where you need to adjust. It will also help you keep yourself on track with your savings goal, whether short-term or long-term.
If you want to know how to save money quickly, watch the video below for some more tips and tricks.
Learning how to start saving money can help you manage your money better and improve your finances in the future.
Whether you decide to start saving today or next month, it is always good to know how to do it and how to sustain it. You will not need a high net income right off the bat. Start small then work your way up to your goal.
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