Wednesday, January 17, 2017 1:00PM / Chinyere Onyia
Saving mean different things to different people and while some believe it is not necessary to save especially when they do not have enough or have constant streams of income, others make it a duty to set aside part of their income regardless of how small it may be. Truth be told, saving can sometimes be challenging, as you will rather enjoy the money now than later. It is however achievable with the right mindset and discipline.
According to the Webster Dictionary, Saving is the amount of something that is not spent or used. It can also be said as monies put aside for future use especially in a bank and for a period of time.
One of the wrong ways to go about saving is to save what is left after spending, the ideal way is “to save first and spend what is left”. Sometimes the hardest thing about saving money is just getting started. Below are some simple ways you can adopt to get you started.
1. Keep track of all your expenses & all streams of income.
You can do this easily by studying your e-bank statement weekly (for those that like to go cashless) or having a pocket diary where you can note down your spending and income.
Understanding your expenses will help you determine the things that are necessary/essential which you can’t do without; for instance data, recharge cards, feeding and transportation/fuelling bills and those things which are non-essentials.
You also need to keep a record of your income since some could be monthly (especially for salary earners) or periodically (for entrepreneurs, students, etc). This record will guide you in putting together your budget which is an estimation of your income and expenses for a given period. According to John C. Maxwell, a budget is telling your money where to go instead of wondering where it went.
2. Have a goal(s)
Start by thinking of what you might want to save for and then find out the cost related to same and how much you can set aside periodically. For instance, you may be saving to start your own business, go on a vacation or take up a professional exam or pay your tuition fees. All of this has to be clearly stated so you can always look ahead and work towards your goals.
Apart from having a saving goal, it is important to save for the “rainy day”. Everyone has one unexpected emergency that comes up and you need to be ready for it so you don’t go taking up loans you can avoid.
3. Take a break from non- essentials
From point one above; you are now clear that some things you spend on are non-essentials which you can do without. In order to achieve your saving goals, you need to take a break from them. You can do this by setting a reward for yourself if you achieve your goals, then you can spend on them. For instance, buying a designer shoe you’ve been longing to have after paying up your tuition fees or going on a treat with your family after setting up that business you’ve always dreamt about.
4. Try Using Standing Orders on your Account
You can open a dedicated bank account or a mutual fund account to meet your saving goal. After doing this, place a standing order from your regular account to this account for withdrawals monthly or on every inflow. Asides from having your money back when you need it, you also get to benefit from interest/dividend payments.
5. Save loose cash, money gifts or monies budgeted for but not spent
Sometimes I assume my money is lost by keeping it far from where I can easily reach it. You can try this with loose cash, money gifts or monies you budgeted for but did not spend by keeping it back in your account or a piggy bank. You have survived without it anyways, so save it for the raining day or that goal you have set to achieve.
Don’t wait till later, you can start NOW.
You too can contribute or share your experiences with us via firstname.lastname@example.org