Sometimes the hardest thing about saving money is just getting started. It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals. This step-by-step guide can help you develop a realistic savings plan.<\/p>\n\n\n\n
1. Record your expenses<\/p>\n\n\n\n
The first step in saving money is to know how much you\u2019re spending. For one month, keep a record of everything you spend. That means every coffee, every newspaper and every snack you purchase for the entire month. Once you have your data, organise these numbers by category \u2013 for example petrol, groceries, mortgage and so on \u2013 and get the total amount for each.<\/p>\n\n\n\n
2. Draw up a budget<\/p>\n\n\n\n
Now that you have a good idea of what you spend in a month, you can build a budget to plan your spending, limit over-spending and make sure that you put money away in an emergency savings fund. Remember to include expenses that happen regularly, but not every month, like car maintenance. <\/p>\n\n\n\n
3. Plan on saving money<\/p>\n\n\n\n
Taking into consideration your monthly expenses and earnings, create a savings category within your budget and try to make it at least 10-15 percent of your net income. If your expenses won\u2019t let you save that much, it might be time to cut back. Look for non-essentials that you can spend less on, for example entertainment and dining out, before thinking about saving money on essentials such as your vehicle or home.<\/p>\n\n\n\n
4. Set savings goals<\/p>\n\n\n\n
Setting savings goals makes it much easier to get started. Begin by deciding how long it will take to reach each goal. Some short-term goals (which can usually take 1-3 years) include:<\/p>\n\n\n\n
Starting an emergency fund to cover 6 months to a year of living expenses (in case of job loss or other emergencies).<\/p>\n\n\n\n
Saving money for a holiday.<\/p>\n\n\n\n
Saving to buy a new car.<\/p>\n\n\n\n
Saving to pay taxes (if they are not already deducted by your employer).<\/p>\n\n\n\n
Long-term savings goals are often several years or even decades away and can include:<\/p>\n\n\n\n
Saving for retirement.<\/p>\n\n\n\n
Saving for your child\u2019s education.<\/p>\n\n\n\n
Saving for a down payment on a house or to remodel your current home.<\/p>\n\n\n\n
5. Decide on your priorities<\/p>\n\n\n\n
Different people have different priorities when it comes to saving money, so it makes sense to decide which savings goals are most important to you. Part of this process is deciding how long you can wait to save up for a goal and how much you want to put away each month to help you reach it. As you do this for all your goals, order them by priority and set money aside accordingly in your monthly budget. Remember that setting priorities means making choices. If you want to focus on saving for retirement, some other goals might have to take a back seat while you make sure you\u2019re hitting your top targets.<\/p>\n\n\n\n
6. Different savings and investment strategies for different goals<\/p>\n\n\n\n
If you\u2019re saving for short-term goals, consider using these deposit accounts:<\/p>\n\n\n\n
A regular savings account, which is easily accessible.<\/p>\n\n\n\n
A high-yield savings account, which often has a higher interest rate than a standard savings account.<\/p>\n\n\n\n
A bank money market savings account, which has a variable interest rate that could increase as your savings grow.<\/p>\n\n\n\n
A fixed deposit (FD), which locks in your money at a specific interest rate for a specific period of time.<\/p>\n\n\n\n
For long-term goals consider:<\/p>\n\n\n\n
Securities, like stocks and mutual funds. These investment products are available through investment accounts with a broker. <\/p>\n\n\n\n
7. Make saving money easier with automatic transfers<\/p>\n\n\n\n
Automatic transfers to your savings account can make saving money much easier. By moving money from your debit or cheque account, you\u2019ll be less likely to spend money you wanted to use for savings. There are many options for setting up transfers. You choose how often you want to transfer money and which accounts you want to use for the transfers. You can even split your direct deposit between your cheque and savings accounts to contribute to your savings with each pay cheque.<\/p>\n\n\n\n
Thinking of saving as a regular expense is a great way to keep on target with your savings goals.<\/p>\n\n\n\n
8. Watch your savings grow<\/p>\n\n\n\n
Check your progress every month. Not only will this help you stick to your personal savings plan, but it also helps you identify and fix problems quickly. With these simple ways to save money, it may even inspire you to save more and hit your goals faster.<\/p>\n\n\n\n
Source: www.bankofamerica.com<\/p>\n","protected":false},"excerpt":{"rendered":"
Sometimes the hardest thing about saving money is just getting started. It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals. This step-by-step guide can help you develop a realistic savings plan.
\n1. Record your expenses
\nThe first step in saving money is to know how much you\u2019re spending. For one month, keep a record of everything you spend. That means every coffee, every newspaper and every snack you purchase for the entire month. Once you have your data, organise these numbers by category \u2013 for example petrol, groceries, mortgage and so on \u2013 and get the total amount for each.
\n2. Draw up a 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