The Right Way To Save Your Money

Advisor February 9, 2018

Saving money has got to be one of the hardest tasks to accomplish. There’s always a tension between paying bills and gratifying needs and/or wants. There are too many distractions that will make it difficult to somehow save a penny. According to some financial advisors, saving money is not that hard and all you need is time to get used to it. But what if you find it hard because you’re doing it wrong?

Yes, there is actually a wrong and a right way on how to save money. This is sometimes the reason why people just give up on it, or their saving habits never last. If you are one of those people, keep reading and assess what are the things that you should have been doing by yourself.

Make a budget

Budgeting your money will give you a good and concrete image of where your money should go

The best way to save money is to budget. Most people get it wrong by only saving what’s left. If you want to actually see savings every month, you should always set aside it first. Then, draft your monthly expenses, from bills to groceries. Make sure to stick to it, but don’t be too hard on yourself if you exceed, especially if it’s still your first month doing it. You can take baby steps, don’t force your progress or you’ll just end up pissed and disappointed.

Have a savings goal

A life without a goal is a life without direction and purpose. If you want to save money, you have to create small saving goals. It can be a $1,000 emergency fund, a 3-day vacation, or a new gadget that you’ve been eyeing for but don’t get carried away. Just because you can spend on stuff doesn’t mean you are allowed to zero your savings out. Yes, you can have small goals but you must also have big and long-term financial goals. The short-term ones are just there so you will leave the long-term savings account untouched.

Make a timeline

Make time to enjoy your hard-earned money once in a while

The hardest part of saving money is that feeling of deprivation. It seems that you can’t eat at the restaurant you fancy, shop for trendy clothes, or splurge a day in the spa. This feeling of deprivation can play games with your head. It’ll make you think how miserable you’ve been and that you deserve some kind of reward. Yes, rewarding yourself is necessary, and no, it’s not bad at all. Make a timeline or a schedule of your pamper time or that one day of the month where you can take yourself out. Along with this schedule is a budget that shouldn’t mess up your savings. Saving money should not kill you, it is a form of self-love and maturity because whether we like it or not, the world is run by money and you need that to survive.

Pay your debts

Whether it be a credit card bill or a student loan, you have to prioritize paying off bills. Having a standing debt can make you restless, you keep on thinking about it. Because of this, you won’t be able to enjoy your hard-earned money. The more you postpone it, the bigger your interest becomes. The best thing to do is to simultaneously save money and pay your debt. The faster you zero out your debts and loans, the sooner you can focus on your savings.

Invest it somewhere else

Saving your money in a piggy bank is bad for your money and the economy, too

One of the best things you can do for your savings is to put it in an investment where you can actually get an interest from. Never put it in a piggy bank or stash it somewhere else for that matter. Not only are you making your money dormant, but you’re actually hurting the economy, too. If you want to see your money grow, invest in stocks or a mutual fund. The moment you see your money go up, the more gratifying it is to save money.

These are the most basic items that you must consider when you are planning to save money according to experts. Though there are many articles online, people still lack awareness when it comes to financial. Remember, you should not treat saving money as a burden, but a necessary step towards financial freedom.