Saving money is important for financial freedom in the future. Everyone will have different goals on what they’re saving for as well as when they would like to acquire it. Learning about how to save or invest your money is one of the most important lessons NOT taught in school! Starting today is the best time to start!
Start with a goal!
Setting a goal will lead to success. I was once told by one of my teachers “failing to prepare is preparing to fail”. Many financial advisors will push the 50/30/20 split. This entails 50% of income to bills, 30% to wants and 20% to savings. For some this will work very well and if you’re able to save 20% or more of your income each month then that is amazing! What if you aren’t able to save 20% or if your bills is more then half of your monthly income. Starting small is the best place to begin! Don’t focus on a set percentage of your income, maybe start with saving $5 a day! $5 a day will turn into $1825 per year.
Automate Savings!
I personally found the most success I ever had regardless of how much I was trying to save was to automate my savings plan. Turn savings into a “bill” payment and set aside the same amount every month! You personally will have to look at your finances and determine how much that is per month. I found automating each month a withdrawal simplifies the entire process.
Ways to Increase Savings
- Pay off loans or debt
Loans and credit card debt eat away at your money gradually. The interest charged on the amount makes it so that paying it off takes longer and gradually takes away from your ability to save any money what so ever. Paying off debt especially high interest debt should be the number one priority!
2. Increase monthly income
Increasing monthly income will allow you to have more to save after all bills are paid. One option would be to work overtime hours if offered at your place of employment. Another option would be to pickup a part time job on the side. Uber, Lyft and other popular delivery apps are making side hustles easier to do when you have the time that fits your schedule! Buying and selling goods you have lying around the house or bargain hunting for items and selling at a profit is another great option!
3. Invest the money!
Investing your savings will allow it to grow over time and further compound into the future. To simplify the process I do strongly recommend automating the investing. Set aside a dollar amount per month that you are able to comfortably save and put it into an automated investing platform. I also recommend not looking at the account and over time you’d be surprised how much you are able to save!
Sacrifice to Save?
Should you sacrifice certain things to save more money? You could look at your monthly expenses and cut back on some things. Perhaps grocery shop at a more value branded store or buying goods in bulk to save a few dollars here and there. I wouldn’t recommend cutting back on everything you enjoy in life just so you are able to save more money per month. You need to enjoy life as well! As an individual you’ll need to find a balance in life. Remember saving money takes time and patience! Discipline and setting a goal and having a plan of action will lead to success.