Sometimes the idea of saving can seem overwhelming. It is easy to overcomplicate all the ways you could save money, and it can be daunting to cut down on the things you love.
However, saving money is achievable and there are some easy ways you can start saving without making a huge impact on your lifestyle. These simple and straightforward tips will help you get on your way to fattening up your savings account.
- Set savings goals
Having realistic goals will help transform your savings dream into a reality. The first step is to decide whether you are saving for a short-term goal like buying a new car or a vacation, or a long-term goal such as, for retirement or a house deposit.
Setting a clear goal will help you get motivated to get started and will help you determine how much you need to save.
- Cut back on costs
Cutting back on costs can sometimes be the hardest part of saving, but it can also be the most effective.
This could involve cutting back on takeaway coffees, lunch purchases and opting for public transport instead of driving. These small expenses may seem insignificant but can add a huge amount to your savings account.
- Record your expenses
Understanding what you spend month to month is an easy way to keep a record of where your money is going. This means monitoring EVERYTHING. That includes every coffee purchase, petrol expense, grocery shop and everything else you purchased that entire month.
- Create a budget
The best way to control your spending is to know exactly where your cash is going each month. Your budget should give you a clear understanding of where your money is going. This will let you make educated decision about how to best to allocate your money. Your budget should be based around expenses that occur on a regular basis.
- Set up automatic transfers
Automatic transfers work best when they are set up on a weekly, fortnightly or monthly basis. This can involve transferring a sum from your checking account into a high interest savings account. This will remove another task off your to do list. An added bonus is that moving money out of your checking account will make it less tempting to spend it.
These simple steps will help you to get on the right track to growing your savings. Checking in on your savings account and watching it grow will give you the motivation to remain strict with your budget. It also will help you identify any problems and give you the ability to fix them quickly.