You know you should save, that it’s the smart thing to do, but you just can’t get it right. Let’s see if we can help you make savings work. First, the bad news: you can only save if you change your money habits. Savings don’t fall from the sky – you have to make it happen.
Now, the good news: the most difficult part of saving is getting started. Once you in the habit, you no longer have to think about it. Also, seeing your savings balance grow, is a great motivator.
How to get started:
- Create a budget: There’s no getting away from the importance of working with a budget. Your budget is your spending plan, but also the mirror that shows you what you do with your money.
- Track your spending: Expense tracking will help you identify where you can cut back on spending and allocate more money towards savings.
- Start small: If you’ve never saved before, don’t set yourself a goal like saving 10% of your salary every month. That will only convince you that you need a bigger salary in order to save. The way to do it, is to start small. Even R10 a week is a start. If you keep it up for a whole year, you will have R520 that you didn’t have before. Start with a small goal and work your way up as you become more comfortable with saving.
- Automate your savings: Set up a debit order that automatically transfer the amount you want to save into your savings account. This will help you save money without having to think about it.
- Sell stuff you no longer need: The money you make can be the start of your savings account, giving you a foundation on which to build.
Now that you’ve started, let’s look at ways to make saving fun:
- Track your savings as you track your expenses: make a note of every discount or special offer you used and add them all up at the end of the month. By doing this, saving becomes a game, rather than a chore.
- Use a fun plan, such as the 52-week challenge that entails saving a specific amount every week for a year (but you can start at any time, you don’t have to wait for January).
How does it work?
Every week you put away the amount you chose, multiplied by the number of that week. For example, if you choose to go with R5 per week, in week one you will put away R5 (because 5×1=5), in week two R10 (because 5×2=10), in week three R15, and so on. In week 52, you will put away R260. Download these PDFs as your guide for the savings plan you choose. - Another fun plan is the no-spend challenge where you commit to not spending any money on non-essential items for a week or a month. This can help you identify areas where you may be overspending and create good habits around saving.
Saving is a money habit that is essential for your long-term financial health and wellness. The trick is to get started and to find ways to keep yourself motivated.
