Setting Up a Savings Plan

Article written by Sherin Dev; Follow on Twitter Setting a savings plan ensures the life of any individual put in a safe side. As a thumb rule, one should start the savings plan at the earliest or at the time of getting the first salary. This would help the wealth creation happen in a smooth and gradual way. Here are some steps to setting up your savings plan in a better, successful way.

1 Start as Soon as Possible

This is the golden thumb rule every individual should bear in mind. Savings plan should start as early as possible. Never believe the myth of waiting for the ideal time to start your savings plan. If do such, we are never going to start the savings but always extend the same to another time. It is simple for our mind to find lots of excuses for the same. To get a better grip to your finance, start the plan as early as possible.

2 Understand Your Cash Flow

One should have right grip and understanding on his own cash flow happening yearly and monthly. This can be easily done through budgeting. If a right budget in place, it is easy to understand the cash flow in each week, month and year.

3 Manage your Monthly Savings

Take a decision to save maximum money at the end of each month. For an example, if you are able to save $250 in the first month and $275 in the second month, increase it till reaching an amount of the maximum possible by you to save in each month. This figure can identify by gradually increasing in each months savings. This would not only make you as a good money saver and ensure you are saving the maximum.

4 Pay to You First

What this means is that, whenever getting your paycheck, ensure your first check goes to your savings account with an amount decided in the previous step. You can even do it automatically by deducting the amount directly from your salary. If that not works, set to transfer the amount from your checking account to savings account in a monthly or weekly basis.

5 Contribute More Whenever Possible

Now you have a sum that goes to your savings/investment account in a weekly or monthly basis. Is that your stopping point? Never do that mistake. Instead, increase this amount time to time to save maximum. Whenever getting increments, bonuses or compensations, ensure you are saving maximum. Once if you have finished with paying a loan or any other debts, from your next month, send that amount also to your savings or investment account.

6 Review Your Plan at the Same Time Each Year

Having a savings plan itself not going to do better always. You have to review the plan time to time to identify any errors or tune it in a better possible way. This would ensure the efficiency of your plan. You can review the plan at the end of each year or beginning of the financial year. It is your own decision when you want to review the plan in each month.