Saving has always been a challenge for most. There always seems to be some unforeseen expense every month and it’s easy to get demotivated. How do the successful savers manage it? They are motivated to be financially independent and keep their eye on the end target.
- They don’t lose sight of the end goal – It’s easy to get distracted by unforeseen expenses, impulse purchases, and easy credit. Stay focused and remember what you are saving for.
- No time like the present – they save now with no excuses to delay. Even starting small and gradually building up is more efficient than waiting until you have enough to save big.
- Needs vs Wants – they know the difference between needs and wants. Our impulse buys are often Wants and not Needs, e.g. going to the mall and you see a sale is on and go crazy with the spending.
- Budget – they create a budget and stick to it. Impulse buys are added to the budget to avoid a shopping binge.
- More cash less credit – Research shows that people can spend more money with credit cards versus paying with cash. Statistics show that the average cash transaction is $22, whereas the average non-cash transaction is $112. *
- Pay themselves first – this means savings and retirement savings are allocated first via debit order before any other expenses. They pay themselves first and then distribute whatever is left into the budget. This way they are financially independent.
- Keep track of little spending – It’s the everyday little spending that adds up to a large amount. Keep watch over those little card swipes for coffee, a sandwich, or small items.
- Adapt to life – your lifestyle changes over time, and so should your spending. You cannot spend the same if you lose your job or earn a smaller salary. Your lifestyle must adapt to your income.
Above all else, good savers learn to live below their means. This means spending less than what they earn, having spare money available for emergencies and being financially independent.
Your adviser can help you get a proper budget and savings plan in place to get you on your way to being financially independent. [email protected]
*https://www.rd.com/
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.
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