Saving might seem to be difficult and almost impossible to do but it can be done no matter what amount of salary you get. There is a rule of thumb on how to save money and keep it from being spent carelessly on useless wants and unnecessary consumables so it is best to learn the guidelines.
This article is focused on the stepping stones to saving your money. After all, it is the fruit of your arduous labor and it must be cultivated, not wasted away. Think of saving as a means of rewarding yourself in the long run.
Find out how much it is that you need to save. Some people might think that they’re already “saving” by putting the rest of what’s left of their money after spending them but the truth is that saving should be the first thing to do right after receiving the money. How can you determine how much you should be saving then?
It usually depends on how old you are, what your goals are, and your income. Try saving at least 10 percent of your monthly income and stash it into a separate savings account. If that seems too much then you can try saving 8 or 6 percent of your salary and see if you can make ends meet with the remaining amount. Ideally, this amount of savings should start during your twenty-something age range and by the time that you’re in your forties it should be doubled, like 20%.
Mainly, how much you need to save lies on your goals, together with the time frame that you need in order to achieve them. Make a list of your short-term as well as long-term goals and together with that the amount that you probably need to save up for your retirement.
You’ll need to bear in mind how much inflation will raise the price tags and give it some allowance because it really can’t accurately be told how the economy will fare. If you already have some savings then you can subtract them from the total amount of your list.
Take into consideration that this type of savings is separate from your emergency reserve fund (which is absolutely untouchable) because the latter will be your safety blanket in case a crisis pops up in the future. Make a calculated guess on how much interest your savings for your goals will earn.
It might not amount to much with low interest rates, but if untouched, the goals might be met sooner than expected. After you’ve calculated the amount that you need to save and deducted from it the amount that you already have saved, calculate the amount that you need within the nearest time frame and divide it by the months from now until the time frame is met, which will then determine how much you will need in each month.
For example, you want to save up for a personal computer after 12 months and a washing machine within 4 months. Say the PC is about 500 dollars and the washing machine is 300 dollars. Divide 500 by 12 which would be roughly 42 dollars, and then divide 300 by 4 which would be 75.
This means that in the first four months you need to save would be 117 dollars a month and for the rest of the year or the remaining eight months it would be 75 dollars per month. Saving money for your goals and dreams is something that requires self-control and determination. Delay immediate gratification and the rewards will be so much more wonderful.