New Year, New Goals. The start of the year is the best time to set practical financial goals. You might be one of the few people who struggled with saving money for the past years, and the new year is one good opportunity to get a grip on your money. Here are a few tips on how to save money for this year.
1. Review Your Finances
If you are to check on your bank book today, how much is the balance? Have you reached your saving goal for the year? If not, it’s time to assess what money is coming in and what money is going out as you spend.
According to a survey, one of the reasons people find it hard to save money is Money Mismanagement. People often make financial mistakes by overspending and not having practical goals for their money.
This year, take a realistic look at your current spending patterns, assess them and do something about them.
2. Have a Budget
When I was in college, I had an opportunity to join a Financial Management seminar. One of the topics discussed was Budgeting. During the discussion, I asked the speaker if I need to budget my money given the fact that I am only depending on my school allowance. The speaker replied, when you know that your resources are limited, it is all the more important to have a budget. It will help you manage the little amount of money you have.
That lesson taught me to create a budget and stick to it. I am not a perfect budgeter, but having a budget helps me spend within my means. It allows me to focus on buying only the things that I need.
Moreover, having a budget allows you to assess if you need to make more money so you can set aside enough money for savings every month. This year is the best time to start budgeting. Don’t wait and start today. The tiny step to budget is better than the perfect budget you have in mind.
3. Pay Debts and Do not Acquire More Debts
Many people find it really hard to save money because of debts. Others are stuck in the habit of paying one debt and acquiring another. When debts are accumulating, this means you don’t have enough money left over to save.
If your goal is to save money this year, start first by paying your debts. Start by writing all your debts, the amount owed, the interest rates, the minimum monthly payments, etc. Once you have written everything, make it your goal to pay for everything at least with the minimum monthly payments. Don’t think about skipping payments as this would only make things worse. Start paying off small debts and do not acquire more debts. This will surely take time, but you can do it.
4. Cut Back on Expenses
If you find it challenging to save as much money as you’d like, it might be time to cut back on your expenses. Try to look for ways where you can lower your monthly fixed expenses and trim down daily expenses.
One good example of this is to consider examining the cost of eating out or preparing home-cooked meals.
5. Start Saving Now
The best time to start saving is now. Even if you have debts to pay, set a goal to save money. You can start small and increase your goal each month. A savings goals calculator can help you with your plan to save. It will help you answer the question, “How much money will I save each month?” and guide you to enjoy your savings in the long run.
Whenever you are saving money, remember that this money should not be spent. Your goal for this money is to make it grow and use it when needed.
Economist William Wood says in his book Getting a Grip on Your Money, “Every day people make personal financial mistakes because they do NOTHING. So, let’s do something with our money this year… the goal is to SAVE.