Saving money 101: A how-to guide

Saving is not a matter of how much you earn, but of how well you manage your money. You might be surprised what’s possible with your eyes set on a goal and a clear plan of how to go about it.

Few already have a long-term commitment to it. Most want to have one but just don’t know how to make it happen. And many don’t even have a clue about where to start. No, I’m not talking about romantic relationships. I’m talking about saving. 

And the good news is this: With some easy tricks and the right mindset, you can take control of your finances – no matter what your income may be.

How to stop making excuses

First of all, in order to start saving money you need to stop procrastinating.

There are many reasons why people put off saving and I’ve heard them all:

  • “I don’t make enough to set money aside now.”
  • “As soon as I’m getting a raise, I’ll start saving.”
  • “With what I earn I cannot save enough to reach my goals anyways.”

Be aware that there will be no better time to start saving than now. Talking from my experience, there is a 99% chance that there is savings potential in your budget, no matter how tight you feel your budget is – it’s just a question of how you prioritize your expenses and savings.

How to start saving money

Here are 3 simple steps you can take today to get started and keep yourself on track along the way:

1.Set a goal

Saving is all about becoming aware of what’s important to you now and what will be in the future. Is there something on your wishlist that you’re saving towards? Anything on your bucket list that has been put off for too long already? If you can’t think of a particular goal right now, that’s okay. Just start by thinking about what you value most – not only today, but also tomorrow. Here are some goals for you to consider:

  • Emergency fund
  • Go on vacation
  • Retirement savings
  • Buy a car
  • Start a family

2.Make a plan

 

Once you know what you want to save for, you need to figure out how much money that will cost you. It doesn’t have to be a precise amount – a rough estimate is good enough to start with. Based on that, you then calculate how much you need to set aside on a monthly basis. This will most likely be a compromise between what you can comfortably absorb within your budget and what allows you to reach your goal quickly. If you are unsure about how to accommodate savings in your budget, check out this article: 50-30-20 budgeting rule

We live only once, so you might as well appreciate and cherish it! Save money to travel the world! To buy your dream house! To make your dreams come true!

3.Automate your finances

A major reason why saving is so hard for many people is due the pain of transferring money to your savings account. This is not a fun thing to do. Don’t torture yourself by making you do it manually! By automating the transfer, you can have the system do it for you. Having an automated process in place is a great way to

  • stay in control of your budget without having to think about it
  • keep yourself from spending the money you should be saving
  • implement a long-term savings plan

 

To sum up, saving is a skill. And with the right mindset, it’s not a hard one to master. All you need is a goal that motivates you and the willpower to go for what you want.