Many people want to save, but only few really save. All of us dream to have a secured future where we don’t worry too much about money. A future where we can travel to places we want to visit or relax in a resort somewhere for a couple of days. Some of us save to prepare for the uncertainty or we say for emergency. Some save for the education of their children, build their own houses and to finance their retirement. There are many reasons for us to save. However, not of all of us do save. In fact, we spend more than what we save. We borrow so much money that we find ourselves buried in a mountain of debt. Remember the formula:
Income-Savings = Expenses
Unfortunately, most people do not follow it. Instead, unconsciously they use this
Income-Expenses = Savings
The former formula guarantees wealth. The latter guarantees poverty.
I remember a story told by a friend to me about a husband who was planning to divorce his newlywed wife whom he discovered shortly after the wedding had a debt of more than a million on her credit card. The girl had been using her credit card to the limit that she didn’t notice the increasing interest. She had been paying at a minimum, and she had no savings at all. Her behavior about money put her marriage on a very shaky ground even before she approached the altar. This is a true to life story which tells us the importance of savings and avoiding debt in our life. We don’t want to happen this to us so in this post I’d like to share three tips to save for your future.
- Set aside a portion of your income and put it in an account where you can’t see it. How much should you save? It depends. But a good start would be 5 percent. Every payday, get the 5 percent and put it on a separate fund before you start paying your bills. Do this for the next three months. Then increase it to 10 percent if you think you can afford it.
- Live below your means. We have often hear this, but I need to remind you because the latest smart phones are on their way to the market. Be patient. Before buying something that’s a bit expensive, list down all its benefits and wait a month before buying to give you more time to think it over if this is necessary or not. Oftentimes, we get carried by too much excitement that results to impulse buying. Don’t envy others who have more things than you. Be grateful for what you have right now.
- Be constant. As you start savings, you sometimes feel tired. That’s a normal reaction when you do something repeatedly. But, continue savings until the point when you are the one who is excited to put more money in your savings. It is rewarding to see your savings growing.
But, it doesn’t stop at savings. Saving is only a start to develop the habit. We also need to invest our savings. I will talk more on this in my future post.
If you have more tips to add, please feel free to write in the comment section.
By the way, you might also want to read the six steps to financial freedom.