Believe it or not, no matter how easy it may seem, saving money can be quite a task, especially when you’re just getting started. The first step towards saving money is to build your mindset. It’s very easy to spend money when you have an inflow without realizing how much is it that you’re spending. Hence, start by having a mindset that will control your future course of action. Here, we’ve listed 5 easy steps towards saving money to get you started.
1. Have a record or memo of your expenses
Once you’ve worked on mindset, start by jotting down your expenses per month to understand how much do you spend. List down every expense including your coffee, tips, household items, etc. Once you’re done with having rough data, work on categorizing it like groceries, mortgage, bills, etc. You can take the help of your bank statements to further analyze it and have accurate data.
2. Aim to save
Now that you have got a record of how much you spend, it’s time to work around it to create some reserve for savings. Start by making a motive of saving at least 10 – 15 percent from your earnings and gradually keep increasing it. Factor in expenses that occur regularly but not as frequently as every month, like your vehicle maintenance. Keep a close eye to ensure that you’re limiting your overspending.
3. Limiting your expenses
If you find yourself struggling to save as much as you desire to, due to your over-expenditure, it may be the right time to cut down on your expenses. Take a closer look at your spending to find out the unnecessary expenditure that you can readily eliminate from your list. For eg, canceling the subscriptions that you don’t use and especially those that renew automatically. Try to stick to eating out once a month if that’s something you do frequently, and so on.
4. Set objectives
If you find it too hard to maintain a habit of saving, try setting some objectives which could make it easier for you. Start by deciding what would you like to save for. It could be for marriage, vacation, for your future, etc. Then determine how much money would you need to successfully accomplish the said goal and eventually analyze how much would you need to save each month to get there. To start with, set some small and achievable goals to get yourself motivated.
5. Try automating your savings
Nowadays so many banks offer this option of automated savings. You’d be required to decide the amount and when to transfer the amount in your savings. This will directly deposit a proportion of the amount in your savings account as soon as you’ll have a paycheck credited. Also, consider having separate accounts for your expenses and savings. Setting up automated transfers will make sure you’re not required to do the process of transferring manually.