How To Start Saving Money
Achieve Resolutions: How to Start Saving Money
You’ve been saying you are going to do it for a while. It’s been a few years since you entered the workforce and while you have some official savings happening in your life – provident fund, UIF, death and disability cover, retirement annuity, and more –more liquid and accessible savings have thus far eluded you. You want to be that person with “six months of pay cheques saved up” one day or you want to be able to afford nice things (such as a holiday) on a whim.
Maybe, for a few years running, you have resolved to start saving. April is almost over and you might be starting to feel that 2016 is probably not the year when you will start saving. It’s so far into the new year, maybe the resolution will work better next year, with a clean slate and a long stretch of year left.
We don’t think so! There’s still a lot of time left. You can start saving today. There is no time like right now! Here are a few suggestions:
Free up some money
It’s very likely that the reason you haven’t started saving is that you simply have no means of saving. The cost of living is constantly on an upward trajectory, which makes pinching all your pennies something of a must. Food costs more, as does fuel. There just isn’t much wiggle room for you to begin saving.
Begin with an audit of your lifestyle. Yes, you work so you can afford nice things such as not having to pack a lunch, dinners out and a social life. But are these things you spend your money on even that nice? What if you could have nicer experiences, like that trip? What if cutting out a few of the instant gratification things could help you attain the ultimate nice experiences you want for yourself?
Once you have done your lifestyle audit and figured out which experiences to cut back on, you will have a surplus of money to put towards your savings.
A few months ago, we encouraged you to start or join a club. Research and psychology has proven that being in a group creates good pressure and influence, especially when it comes to achieving goals. Join a savings club of people who can help you grow the little money you have to save. Your R200 alone won’t earn as much interest as a monthly saving of R200 from 20 people combined.
It’s important to do your research on savings clubs before you join them. If it sounds far too good to be true, it often it. If it sounds a bit or a lot like a pyramid scheme, it probably is one of those. Don’t give them any of your money.
Another way you can join others in your quest to save money is through carpooling. Driving to work alone every day may seem peaceful, but petrol prices are always going up. Carpooling with a couple of colleagues could save you fuel money and free up a few hundred rands for your savings. Besides, Skhumba Fridays on 180 with Bob will be even better to listen to with others in the car.
Keep it separate
Now you have a few hundred rands freed up each month, one way to avoid getting tempted to spend the money is to get a separate account for these savings. Make the new account a beneficiary on your main account and automatically transfer the money you are able to save monthly like any other debit order. Automating the process will help keep you from being tempted to skip a month.
Keeping these savings separated from your regular account will make the money out-of-bounds to you. Once you have a biggish sum of money saved up, you can then contact your bank and talk about fixed savings options.
Those are our tips, with these you will be well on your way to saving money for a rainy day or that experience you desire, maybe a Kaya Travel experience…