A person’s ability to save money doesn’t entirely depend on how much he gets to take home from his pay check. In fact, some people who earn bigger incomes actually have no savings or saving goals and even fail in managing their finances. So, don’t be disheartened if you only have a modest income. Make your money grow by coming up with a definite financial goal and using these strategies for a more effective savings plan.
- Set a Savings Goal. A good way to save is to ensure that a good part of your money goes specifically for you and your future. Put your savings in your bank account to make it from impulse spending. If you don’t have a bank account yet, open one and deposit at least 10% of your income every month. Over time, your balance will grow and that will actually encourage you to save more.
- Reallocate Your Money. The most important part to effectively save your money is to save what belongs to you first. Previously, you might be trying to pay everything else first—bills, groceries, etc.—then figuring out how to have something left for your savings. This shouldn’t be the case. Reallocate your income to your expenses and don’t forget to include your savings. Get creative: find ways on how you can cut down your expenses so that you can leave your savings intact.
- Use the Envelope System. One of the best ways to effectively save money is to do the envelope system. With this system, you’ll be able to keep track as to where you’re actually spending your money, allowing you to save effectively. Purchase envelopes and have each of it labelled according to your expenses.
- Eliminate Debts. If you’re planning to start saving a good part of your income, then the best way to get it started is to eliminate any existing debts. The sooner you settle your debts, the less interest you’ll have to pay. That means the money that’s supposed to go to the creditors can start accumulating in your savings account.
Saving money can be quite difficult to do if you lack the sense of self-discipline, but by considering any of these strategies, you’ll surely be able to enjoy your pay day while being able to save for a better future.