Save money

5 effective ways to save money

You’ve got that new job which pays well and you’re over the moon. “250k a month! I don arrive, you tell you self.”  A huge smile creeps up your face and you’re just about to turn up!

Before you do, have you prioritized? Have you saved? The truth is, the more money you make, the more you spend.

So, just before you go broke, read the step-by-step guide to having fun and saving big.

1. Record your expenses

Keep track of all your expenses. This means that you take note of every coffee, newspaper and snack you buy. With this, you will know what your monthly expenses are.

2. Make a budget

Now that you have an idea of what you spend in a month, the next step is to organize your recorded expenses into a feasible budget. Your budget should shape how your expenses tally with your income. This helps you plan your spending and curb overspending. It is advisable to highlight some expenses that occur regularly.

3. Plan on saving money

You now have your monthly budget. It’s time to carve out a savings category within it. It is ideal to put about 30-35 per cent of your income as savings. If your expenses are so high that you can’t save that much, it might be the right time to cut back. Identify the non-essentials such as entertainment, dining out and shopping that you can spend less on. That should do the trick!

4. Choose something to save for

One of the best and most effective ways to save money is to set a goal. Think of what you might want to save for—anything from a down payment for a house to a vacation; or maybe the purchase of a plot of land.

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5. Decide on your priorities

Your goals are most likely going to have the biggest impact on how you save money. It is wiser to plan for the long-term goals. This doesn’t mean other goals are less important.  Prioritizing goals can give you a clear idea of where to start saving.

Other tricks include;

  • Pick the right tools
  • Make saving automatic

Source: Bank Of America

Are you skilful in the art of saving? Let us know in the comments section.

 

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