retirement piggy bank

Six Effective Ways to Learn to Start Your Own Savings

Did you ever ask yourself why you work? How many years have you been working now? How much have you earned in the total years? How much is your savings at present? Most people, if asked especially with the last question, would come to realize that they haven’t saved enough or nothing at all.

retirement piggy bank
own savings

Are you one of the many who do not have enough money left to spare for emergency funds, future needs or retirement, or just for a family vacation? In short, do you have no savings? Then read on and know how to be able to budget your money and then start saving.

Instructions on how to save Money:

First – Make a list of Monthly Expenditures

List down your monthly expenditures, these include utility bills (electric, telephone & water), home mortgage amortizations or monthly rentals, insurances payments, grocery & marketing expenses, transportation or fuel, and other necessary expenses you incur every month.  These items must be your basic needs and not items which you can live without, just like those reflecting in most of your credit card bills (shopping, dining, leisure items).

Second – Make a list of Debt Obligations

On a separate paper, list down all your debt obligations. Credit card bills go in this item; as well as car loans, salary loans, and bank loans or money borrowed from a friend.

Third – Make a list of Additional Expenses incurred

On another separate paper list down any other expenses which does not belong to the prior two categories. These items consists of expenses incurred for beauty treatments, shopping’s, dining’s, and even money spent on night outs with friends. In short, these items are not necessities, more of pleasure and waste of money.

Fourth – Make a Summary

Calculate all items in each category – monthly expenditures, debts, and extras. Add them all up then subtract from your monthly earnings. Do not be surprised if you will discover that you are spending more than what you are earning.  If that is the case, then it is high time to change your lifestyle.

Fifth – Make an Action

To start with, check again all your lists and take note of the items which you can omit. This means, stop spending on these items. For example, if you spend too much in dining out, learn to cook and pack your own meals. If you spend too much in late night outs, invite your friends instead at home.

Sixth – Start your Savings

All the unnecessary expenses that you have omitted will go and remain in your savings. Learn to start saving for emergencies, retirement, or a family getaway. Make a commitment not to be tempted to spend these savings for anything else other than its purpose. You can put it in time deposits if you like for safekeeping.

It is very important that each of us will learn how to save. All you need is to follow the steps above and a whole lot of discipline and determine. You may be surprised that you have already discovered various ways to lessen your monthly expenses, thus your savings increases.

Irina Webandyou is a financial assistant and a guest poster. She runs Logbook Loans from eMoneyBuddy. She loves covering news about finance and business.

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