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“If you would be wealthy, think of saving as well as getting” – Benjamin Franklin
This is a guest article by Allan Jones
Starting a saving plan is easy sticking to it is not. This is the problems many people face when they want to start saving for the future. They have lofty estimates regarding the amount of money they will have after a certain period. In the excitement of it, they forget to emphasize on practicality. If a saving plan is not practical, it will not work. This is why you have to think practically when developing a saving plan for yourself. Here are five things to do when you want to start a saving plan.
Do the Calculations
The first thing you need to work out is how much money you have to save. If there is a specific purpose for which you are saving, calculate the amount of money you need. Then work out how much money you have to set aside on a monthly basis and for how long you would have to do so. Make sure that the amount is reasonable and the time sufficient.
Make a Budget Once you know how much money you need to save every month, draw up a budget. In the budget, list out the total income you earn from all sources. Next, jot down the household expenses including the amount you have to save. If the expenses are more than the income, you need to redo the calculations. Otherwise, you are good to go.
Set Up a Savings Account
A savings account at your bank is the best place to keep your money. Since the money needs to be in a safe and secure place, trust your bank. This way, you do not need to worry about handling the money yourself. The biggest advantage of placing the money in a savings account is the interest you can earn. Almost all banks offer interest on savings accounts. The interest income can boost your savings and help you reach the amount earlier.
As soon as you receive your salary, put the amount of savings into the account. If you are planning to do this at the end of each month, chances are there would be nothing left to save. By setting the amount aside at the beginning, you are in complete control of the budget. You will have a decent idea of how much money you have for spending.
Cut Down on Expenses
Try to curtail your monthly spending. Do not indulge in things you can do without and stick to the necessary expenses only. If you are able to reduce your monthly expenditure, you can save comfortably. Else, you will be worried about whether you will be able to reach your target or not.
These are five things to do when you want to start a saving plan.
About the Author: Allan has been actively saving money for the last 3 years. He loves sharing his experiences and help people choosing the best savings accounts.