We are three months into 2024 and your savings are not how you expected them to be.
Maybe you don’t have the best financial goals or maybe you don’t understand how well you can make your savings better.
When we began 2024, I also set my financial goals and one financial habit was to have a consistent savings account. Savings involves having great financial discipline.
You never know when you will need the emergency money or when your savings might save you. Here are some of the tips that my financial advisor gave to me on savings.
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Budgeting
Budgeting is a structured framework for managing finances.
A clear budgeting scheme can help you understand your income and expenses.
You also get to manage where to allocate your funds and how much should you allocate to each expense.
Tracking your income and expenses increases your financial consciousness and helps you improve your financial habits.
By budgeting, you also give your expenditure priorities, this allows you to cover the crucial expenditures and plan well for other miscellaneous expenditures.
Proper budgeting also allows you to cut expenses which allow the extra funds to be channeled to your savings account.
Automated Savings Account
You can consider having your savings automatically deducted from your payroll into say, an investment policy scheme.
In the same way, your taxes and credits are directly cut from your income, you can implement this into your savings plan.
Aside from this being a good saving scheme, it is also one of the most consistent ways to enhance your saving skills.
Come up with a certain limit, maybe 10% of your income, and decide that this amount will be automatically taken to the investment or money market scheme.
That also gives you savings discipline as it has no interjection that may have you end up spending the amount.
Prioritize High-Interest Debts
With our current economic conditions, many of us might be living off debt.
Constantly borrowing more from the local grocery shop or even taking on having high-interest debts from loan sharks.
All these lending applications on our phones have a big influence on having borrowing habits.
However, you can always ensure better savings by paying off the high-interest debts first and planning to stay away from them.
The debts that accumulate interest at higher rates can be financially draining. Getting rid of them reduces the amount the eventual amount that you would pay if you let them accumulate.
Once out of the high-interest debt cycle, you can lay out a solid foundation for future savings and investments.
Track Your Savings
The satisfaction that comes with seeing your savings increase!
When you track your savings, you also motivate yourself to save more and more.
You can gain clear progress on your savings and this allows you to plan well and develop great saving habits.
Knowing why in a certain period your savings reduced or increased sets you on a path of aligning your spending habits to accommodate the saving goals.
Reduce Expenses
When starting my financial independence journey, I was told to draw the line between a want and a need.
This way, you can always plan on how much you will spend and on what.
You can always prioritize your needs and wants or find cost-effective ways of acquiring stuff or experiences.
Negotiate for your expenses and effectively reduce the amount for each.
Increase Your Sources of Income
Investing helps increase your sources of income and can boost your savings potential.
The increased sources of income allow you to allocate more funds to your savings plans.
Increasing your income source also gives you financial security.
You always have an emergency fund set aside that can be different from your savings fund.
However, increasing your income should not necessarily mean increasing your expenditure.
With better income, your expenditure is likely to go up but make sure to equally increase savings amounts at bigger proportions than before.
Take Advantage of Employee Benefits
In some places of work, there are different employee benefits that one should look out for to help build savings.
Your employer might have a retirement savings plan and pension schemes.
This allows you to save for your retirement and also benefit from the employer matching fund that the company offers.
Enrolling in programs like health benefits, education assistance, employee discounts, and wellness programs allows you to increase your savings.
Check on which benefit your company offers and where it makes economic sense, sign up for them.
Generally, a clear saving plan can help increase your financial security and help you achieve your financial goals.
You don’t have to save a huge amount of money but you can set your own goals on the amount you want to save.
Saving habits can be hard, but these tips and others can help you out.
