Do you want to learn how to save money effectively? I share simple methods that you can put into practice and, from today, start accumulating your savings.
Saving money is not a one-time activity but a process. In the long term, the habit of saving can change your life, and I trust that these four simple ways will compel you to take the first step to enjoy the fruits of your savings later.
Saving can be compared to making a diet. Initially, you must control yourself, but after some time, it becomes routine, and the effects are always visible.
Take Small Steps
All this is not about accumulating large sums of money immediately. If you have never had the habit of saving money, then you should start doing it gradually.
There are many ways to save, but no one learns how to use all banking and investment products in a single day. Therefore, where do you start?
Start saving your money in a piggy bank. This is the oldest method of saving, but it is still effective. Of course, the funds collected in the piggy bank are not giving you interest, but it is the first step to get into the habit.
If you have never saved, the most important thing is to develop the habit. This means often saving even a tiny amount of money.
One way to do this is to put the rest of the money you have left after making the purchases in the piggy banks. You go to the store, you pay for purchases, and once in the house, you put all the coins in the piggy bank (assuming you pay for your purchases in cash).
When you have already accumulated a little money, it is time to move your savings to a savings account. It is where money is readily available and where interest grows little by little.
Determine the Goal of Saving
In one of the articles, I mentioned the importance of having financial goals. This is also dedicated to identifying your saving goal.
Your goal may be a trip around the world or the renovation of your home. Let us say you are thinking about buying modern furniture for $2,400, and you think, “Alright, I need $2,400, and I’d like to buy it in a year, which means I have to save $200 per month.”.
But why is it so important to know our goal in this situation? If you know what you want, it will be easier to do it because you will be able to deny yourself the pleasure of a moment – “These new shoes cost $100, but maybe I do not need them, and this month I will save $100 more to buy the furniture “-
To fulfill your goal, you must give up other things, and it is easier to do when you know your destination.
Pay Yourself First
Although it is well known and straightforward, few of us make use of this principle.
For example, when you get the money as a monthly work payment, you immediately transfer part of this money to your savings account.
Then, with the remaining money, you pay all your monthly expenses.
We fail to save money from what we have left at the end of the month. It is true because we have nothing left at the end of the month. Therefore, we must do it at the beginning of each month and deposit a percentage of our salary into another bank account.
Test and Choose What is Best for You
One of the essential saving principles says: use the savings methods that work for you. This principle is not only applied to save money but also to all the principles of personal finance. I assure you that I will repeat it in this blog, so you do not forget it.
You can find a lot of information on how to save money online and in books. However, eventually, you will realize that being efficient is not about using all the world’s methods, just because they are working for other people.
It would be best if you experiment, try different options, and see what works for you. In this blog, I also share the various saving methods, but I do not want to say that you will obtain precisely the same results as me by using them.
If you do not know which method is the best, there is only one way to know: check it and analyze the results.
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