10 Ways To Develop A Future-Proof Savings Habit In 2020
It is much easier to work for money, and spend it all monthly without thinking about the future. Since you worked for it, you should have a right to buy whatever you want with it, right? It is not always that way, saving is very important and if you don’t put a structure to it, you might never do it. When it comes to money, we’re not putting away enough to save. According to a research by Northwestern Mutual’s Planning and Progress in 2019, few people in America have more than $5,000 in their account, while some others do not even have a retirement savings.
The future doesn’t have to be something far, it can as well be tomorrow, and there’s a need to plan for it. You do not know what the future holds, but you’ll be safe if you plan for it. As opposed to what people think, you don’t necessarily need to earn large income to save. The truth is, if you can’t save money when you earn little, you probably won’t be able to save when you start earning big, too.
Saving habits falls suddenly on no one, neither is it a gift. Developing a saving habit takes a process and it requires some steps. Here are 10 ways to develop a future-proof savings habit in 2020.
- Have a budget
This is the first step to take in getting better at saving. Set a budget and be sure to stick to it. You have to be realistic about your income and expenses, then set an attainable figure that you can meet up with every month. This shouldn’t be a license to set a low budget but you shouldn’t go overboard either. Saving requires your commitment, it is not just enough to think about it or plan to, but actually taking action towards it. One thing about money is that if you don’t set a standard to how you spend money, you’ll be surprised at how the money will disappear without you having tangible things to show for it.
- Understand the concept of Cash Flow
Analyze how money comes in and where they go. Do a review of your spending and count down on things that aren’t necessary so you can have money available for saving. You have to be intentional about cutting down cost on things. You shouldn’t just spend money as they come into your hands, you have to be deliberate about what you spend it on per time. Saving is never easy, but it takes discipline and once you can achieve it, your future self will thank you for it.
- Work with your partner
If you have a spouse or live with someone, communicate about your household finances. If you desire to safe and cut down on cost in the home, and your partner doesn’t agree with it, it might likely not work. The people you live with has to be on board with you on your plans to save. Make them understand what your plan is and how you intend to achieve them. They can also serve as accountable partners for you. Once you’re accountable to someone, you tend to be more conscious of saving per time.
- Make it automatic
Technology has made all things easy, saving inclusive. You can make use of online savings platform, like PiggyVest and some other platforms which allow you to save automatically. Once your account details are saved on the platform, it removes a certain amount of money that you have set from the account at a specified time that you have set. You can also do this straight from your paycheck. Have your bank remove a certain amount into a separate savings account before you cash out your monthly paycheck. If you want to wait till you have some extra cash to save, you might end up not saving at all.
- Separate your needs from your wants
Understand the differences between needs and wants. Needs are essentials that you can’t do without, while wants are the things you desire, but can still survive without. You don’t have to acquire everything you want per time, learn to say no to things that don’t align with your financial budget and goals. Even your needs are to be placed in order of priority, if they are not necessary for the present time, you can as well let go.
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- Look for things to cut off
You may not know what you’re spending money on until you carefully do a review of your finances. Review the things you’re spending money on, what you pay for, and cut down on things that you don’t need, or that you can get at a lower price. Analyze your bills, such as utilities, food, taxes, gas, and insurance, there might be a way to cut down on how you consume energy, thereby reducing the bill you have to pay for it.
- Consider the children
If you have kids, you have to think about them too. Most of the things you spend money on might not be for you but for your kids, so there is a need to teach them about spending and saving too. Be an example for them in saving, as they’ll be watching what you do with money and how you actually save too. Make them understand that they cannot always get what they want, but they have to wait sometimes. Encourage a saving habit in them by offering to top up whatever they save, allow them to save for things they desire to get. You can make it easier for them by having a small box, piggybank, or envelopes for them to save in.
- Set a target
You can help yourself by setting a target of a particular amount for a specified period of time. You can as well give your target a name, so it makes it more specific. When humans are to meet a target, they tend to take it more serious and aspire to achieve the target within the given period.
- Invest your money
Investing is also a form of saving, as it helps you tie your money down in something that will eventually yield profits. Make it a habit to invest, it is one of the essential keys of long-term returns. Invest in lands or real estate, and you can be sure that there will always be vslue on it anytime you wish to sell it.
- Start saving
Your actions weigh more than your decisions. After you have decided to save, you have to take a step further by actually starting. You can’t expect it to be easy, as there will be responsibilities that want to compete with your resources, but your determination and discipline goes a long way in helping you achieve your goal. No matter what issues come up in your finances, saving should be a priority on your list of financial spending.
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