A challenge that almost all adults experience is saving money. With the bulk of expenses you have to make and your tight budget, it’s admittedly difficult to set aside funds for your savings and do it diligently.
But saving is vital to keep us financially secure and stable. We might have set a budget that can cover all our necessities and obligations. But what happens in case of an emergency? Hospital bills can easily take a toll on our budgets. That’s why we need to have funds in place in case of emergencies or unforeseen circumstances.
It might seem impossible to save money, but it’s not. Small changes in our lifestyle can go a long way in helping us set aside money for our savings account. Here are some tips to help adults save.
Set a budget
Time and time again, we’ve been told to set a budget and adhere to it. Of course, that is the most effective way to save — to limit your spending only on the necessities. It might seem like a hassle, but there’s no other way out. The first and foremost step in helping you save money is to track your spending habits and stop those that are not essential.
Start creating a budget by laying down your monthly income. Then list down everything you have to pay for, such as your rent or mortgage, debts, utility bills, groceries, etc. Set aside the money needed to settle those obligations. Divide whatever’s left into two and put one half aside for your savings. You can use the other half for entertainment, leisure, or whatever else you might fathom.
Set up an automated transfer
The hardest part about saving is temptation. Having all that money in your bank account makes you want to use it. To help you stray away from the temptation of spending, automate your money transfers.
Compute the value of one-third of your monthly income. Then talk to your bank and set up an automatic transfer of funds to your savings account. This way, the moment your salary arrives at your account, the bank will automatically transfer one-third of it to your savings. It will be out of your sight and mind; you won’t get tempted to overspend.
Follow the 24-hour spending rule
There is something new to buy everywhere we go. It’s so easy to walk around the mall and find something you want (but don’t actually need). But planning what you spend is the best way to avoid making impulsive spending decisions.
Choose to adhere to the 24-hour spending rule. Whenever you find something you want to purchase but is not part of your budget, wait 24 hours before buying it. This period will allow you to reflect on the decision thoroughly. Chances are, you won’t even want to buy it the next day.
Settle your debts first
Although ideally, you should be putting money into your savings account and not any place else, you should first settle all your debts. Before dedicating yourself to saving, make sure you’ve paid off any outstanding obligations. Otherwise, it will be very counterproductive trying to save money but letting your debts spiral out of control.
Saving money is a huge challenge faced by many adults. But we must do our best to do it to help ourselves survive potential financial difficulties in the future. Take these tips and start being smart about how you spend your money.