This 2015, Learn How to Start Saving – for Real

2015-0224 This 2015, Learn How to Start Saving - for Real

MANILA, Philippines – One of the most common New Year’s resolutions made by people is to start saving up.

To set aside more funds for a rainy day or to be able to make a major purchase such as a car or a house in the future is something we all aspire to, but we can just as easily succumb to the temptation of spending—and then regret it when we realize that we don’t have much left in our wallets or bank account.

How, then, should you teach yourself to start saving?

Cementing your decision to save money is the first real step to saving, and this resolution should be backed by action. Deciding you want to save means that you will take a direct hand in your money matters instead of allowing circumstances to dictate how much you will spend and save. This may sound difficult but it is something you can set your mind to do. By knowing your needs and understanding your financial situation, you will be able to save effectively.

There are two important things that you have to know to help you get started on the saving route:

First, how much you make and spend. It’s quite amazing how many people could not account for how they spend their money on a regular basis. At most, what they have is a general idea of the amount that goes into their payrolls and the amount that they’ve spent, without a breakdown of their actual spending. Having this information will be your starting point. It will allow you to make a realistic savings plan that you can actually implement and adhere to.

To know this information, get hold of your most recent financial records – your pay slip, credit card statement, utility bills, bank account, etc. List what you spend on individually and as a family to give you a better idea. You may be in for a surprise!

Second, think of how much you want to save. Be realistic about your targets. To illustrate, you cannot realistically plan to save 100% of your earnings if you are the breadwinner in your family. You may want to save a percentage of your earnings—say 20%—or you may want to save a set amount like P1,000 per payday. The choice is yours, and will depend on your circumstances.

Based on the information above, design your individualized saving plan.

Here are some points to consider to help you start saving.

Savings first.

Instead of saving what is left of your salary or earnings at the end of a given period, make sure you save a pre-set amount first then spend what is left. This ensures that you can build up your savings and sets your spending boundaries.

Put your savings in a separate account.

Having a separate savings account keeps you from touching your savings unnecessarily. You can open a separate savings account and transfer the pre-set amount from your usual payroll account to this account.

Look at areas where you can make cuts.

Sometimes, you can be spending so much on unnecessary items that somehow add up: a daily latte at the coffee shop instead of brewed coffee from the cafeteria; taking the cab when the MRT provides a faster and cheaper option; paying for internet data charges when there is free wi-fi. Think of how your usual day and week goes to identify those things that you may want to cut.

List down your expenses.

Recording your expenses is a good way to monitor your spending. Keep this list and compare your expenses in the past few months to see your spending patterns. You may discover that you have already spent a small fortune on gadgets in the last six months, or that you’ve been shopping too frequently for shoes and clothes that are just crowding your closet.

Have a budget.

This is a good way to control your spending. For instance, you can set a budget of P1,000 per payday for your personal entertainment expenses. Having this limit ensures that you choose entertainment options that suit your cash flow and will not hinder you from reaching your financial goals.

Keep your eyes on the prize.

Your savings should contribute to your long-term financial goals. Whenever the itch to spend beyond your budget hits you, start visualizing that dream home, start-up business, or new car, and that should encourage you to stay within your means.

Make 2015 a game changing year for you, and for your savings. Good luck!


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