Here are 5 practical steps for developing a practical savings plan:
The best way to work out how much you want to save is to set specific financial goals. If there is a specific thing that you are saving up for, start by calculating how much you will need to save in order to pay for it. Then, figure out how much money you will have to set aside each month in order to reach that goal in a reasonable amount of time.
For example if you want to buy a house, determine how much of a down payment you’ll need. If it’s retirement, you’ll need to figure out how much money you’ll need to live comfortably for 20 or 30 years after you stop working.
One important thing: if you are in debt, consider clearing up your debts first. Eliminating debt is the fastest way to free up money. Once the money is freed from debt payment, it can easily be directed to implementing your savings plan.
Once you have set up your financial goals, next you need to make a budget. Treat the amount you have come up for savings as an expense if at all you are serious about saving.
If you don't have a savings account, it's time you set up one! If you already have one, Good! Savings accounts provide a safe, secure and convenient place for you to keep the money you're saving and can also, in certain instances, even help build your savings.
Let me guess...Your strategy was to try to save whatever remained at the end of the month. But I know for sure you never did it. Infact you know why...NOTHING REMAINED AT THE END OF THE MONTH!
Now this is how you should do it. Savings should be your priority, so don’t just say that you’ll save whatever is left over at the end of the month. Deposit your savings into a savings account as soon as you get paid.
An easy and effective way to start saving is to simply deposit the amount into a savings account. You can set up an automatic transfer from your checking or current account to your savings account. Or if you are employed, tell your employer to deduct the savings from your paycheck and the money be directly deposited in your savings account so you never even see it on your paycheck. Infact you can do this when saving for retirement. Let the money be taken directly out of your pay to your retirement accounts.
The easiest and quickest way to start and continue saving money is to control your spending. Watch out for impulse buying and stick to your budget.
Follow these five steps and you will be on your way to establishing a savings plan to achieve your goals and dreams.