The mind is willing but the pocket is weak. Saving is one thing most people especially young professionals desire to practice but just can’t. Is it too hard to save? May be it is, especially when you have a meager income. Some people don’t have meager incomes, but they still can’t save, not that they don’t want to. They just can’t. They always finish their incomes before the next incomes arrive. In this post, we would review some widely known ways to save or build a saving culture then I would share my experience and what works for me with.
First of all you should know that there’s more to saving than spending less money. Some people starve themselves to save whiles they can save and still live comfortably.
When you decide to save, some questions should be on your mind and finding answers to those questions is the beginning of saving money. How much money do you want to save? Where would you put it? How can you make sure it stays there? Why do you want to save? How often do you want to save? In my opinion, these are enough for savings to begin and growth fast.
How much money do you want to save? Yes, How much? Ask yourself. Begin with the end in mind. I want Ghc 250,000 to buy a house, I want GHc 15,000, I want $ 7000, I want $10,000, I want this amount, I want that amount, blah blah blah. This involves setting a financial goal or target. Getting the target would help you know how much to put down on time to time basis. The goal could be short term or long term. You must decide on that and it should be realistic. You can’t be earning GHc 1000 monthly and you want to save GHc 250,000 by the end of the year. It cannot happen, if that’s your only source of income. With reference to my ultimate goal and one of my sources of income, I want to save Ghc 400 a month and that would give me GHc 4800 after 1 year without any toil or extra job or investment or appreciation or depreciation in value.
Some people don’t believe in saving money since they think a lot more can be done with it without stashing it in the vault somewhere. No matter what they say, you should know that the basics for doing a lot more with your money can be found in the saving culture.
Where do I put the money then? My grandmother would tell you, put it under your bed and open one eye whiles sleeping. Most people put it in their savings bank account, a place I would recommend for beginners. One thing you should do is separate it from the money you intend to spend. If it involves getting two different bank accounts like I do, get them. About making sure your money stays there, you have to ensure you don’t withdraw it for anything even if there’s a ‘need’. It is advisable not to get smart cards for this particular account. You only need the account number to deposit. This makes you develop a savings culture the hard way.
Over the years, I have learnt to save and invest every 10% of income that gets to me. I recently increase the percentage to 30% because I have a different and bigger target. How do I survive? I only budget with the remaining 70% of the incomes. This means that, I don’t even book the 30% as my income, or a spendable income. I see it as money for my business or for someone. I always pay myself or my business first. Before you start spending, deduct the amount you want to save and stash it somewhere, (savings bank account in this case). No matter the demands of my budget, I try to cut expenses and focus on the amount left. I have been doing this for years, so it’s now a habit. You’ll never lack money if you engage in this and the best part is that you’ll still live comfortably as a young professional.
Below are the steps to take to begin the journey of building wealth and getting a savings culture.They are steps from an article I read prior to writing this.
- Kill your debts
- Set savings Goals
- Established a time frame
- Breakdown the target to know how much you have to save monthly or weekly.
- Keep a record of your expenses
- Cut down expenses
- Reassess your savings goals
- Make a budget
- Stop using credit cards
- Open an interest bearing savings account
- Pay yourself first
- Don’t give up and don’t be discouraged.
Remember little drops of water make a mighty ocean. Develop the savings culture. Follow the steps at least, and begin the journey to creating wealth. This is what works for me.