Many consumers are under the false assumption that saving money would be much easier if they made more of it to begin with. The fact is however that saving money can be done by practically anyone, no matter what their income might be, if it’s done habitually and with just a little bit of forethought and purpose.
If you want to become a successful saver, the tips and advice below will help you to do just that. Enjoy.
Tip 1) Automate your savings
This tip has been around for decades but, these days, it’s even easier to do. Setting up an automatic debit from your paycheck into either a savings account or some type of investment account is the best way to put your money aside before you even see it. For many people, it’s the only way to save.
Tip 2) Start saving as early as possible
Most people in their teens and 20s save practically nothing. Those that do however are the ones that end up going into retirement sitting pretty, with a egg nest eggs that’s big enough to take them into their golden years in style. The earlier you start saving the more your money can take advantage of the power of compound interest as well, meaning that you’re using your money to make more money, rather than using your time and effort to do the same thing.
Tip 3) Diversify your savings
Okay, so the old adage about “not putting all your eggs into one basket” is a bit silly. What are you going to do, use 12 baskets for a dozen eggs? What this old adage actually means is that you should diversify and, when it comes to saving, it’s just as true. Having a savings account is simply not enough. You need an IRA, a 401(k), stock investments, savings bonds and so forth. The more diversified, the better.
Tip 4) Create a budget and stick to it
Here’s the thing; there’s simply no way to know how much money you can save if you don’t have an idea of how much money is coming into, and going out of, your hands every month. The only way is to set up a budget and then stick to it. Once you do, you’ll know where your money is going and be able to cut back on unnecessary, unneeded or frivolous things and use that money to build your savings instead.
Tip 5) Stop trying to keep up with friends, family and the neighbors
There is one thing that you can always count on; someone will always have a bigger house, a fancier car, a newer smartphone, then you. If you keep trying to match and/or beat them, you’re simply just beating yourself instead. The fact is, most of those people are so far in debt that they can’t even see. Is that where you want to be as well? If not, be happy with what you have and only replace those things that you truly need.