Simply put, saving is like postponing consumption. In other words, you could have spent that money but instead you put it in a savings account for later use. Now, how do you do that? In this article, I will walk you through the strategies you can use to make sure your savings are growing. These methods include saving first before spending, treating savings like a bill you have to pay at the end of the month, and separating your savings from the income, among others. With these tips, I believe you can slowly and consistently fatten your savings account and enjoy the benefits later on. Let’s see some of these methods.
The first strategy of saving is by putting aside money before you spend. Here, I would quote Warren Buffet, the billionaire investor, who says “Do not save what is left after spending, but spend what is left after saving. It is clear that Buffet advises people to prioritize saving over spending. I concur with his advice because most of the times we find ourselves spending first and by the time we stop, there is little or no money left to save. That experience is very regretful, especially if you had many dollars but you did not save even a penny. This brings up another work-around strategy to increase the money for savings, which is by being frugal when it comes to spending. Instead of buying products that are overpriced, seek for commodities that are sold at a fair price. That way, you will leave more money that can go to savings. Adopting this strategy can help you save money once your salary or business proceeds hits your bank account.
Secondly, you should separate your savings from your income. That means having a separate account for each. Putting aside a little money in a savings account or a vault at home is highly advised. While at this matter, be also advised that it is better to start with small amounts that you can build on instead of some outrageous high amount that you can afford to save. Saving too much money is almost like saving all your income without spending it on consumption. That is unrealistic because the moment you run out of the little money you have, you will run to the bank to withdraw your savings. And that is not what savings are for; they are for staying saved. Therefore, budget your income and allocate some money to income and spending. Then, put each in a separate account and save little amounts that you can afford to pay every week or month.
The other strategy for saving is by treating savings like a bill you have to pay every month. You know the power bill, water bill, internet bill, or the phone bill you pay every month, classify your savings as one of these bills. That way, you will make savings an expense or an obligation you have to fulfil every time you get your income. There is a psychological part of adopting this strategy. This is because the human mind responds to stressors in the environment for a person to feel comfortable. Therefore, if you feel like you are owed money and yet it is your money, you will definitely pay it to the savings account holder to feel comfortable. Over time, you will develop a habit of saving and even forget that you do that. Then, your savings will keep on accumulating until you reach the targeted amount.
With the various strategies of saving, I think we can build our savings and reach the goals that we have set for ourselves. It is not hard to save first and spend later, separating your savings from your income, or treating your savings as a bill you have to pay. No. You can do it because it has been done before. It is all about learning the tactics and getting right into the game of saving. In this way, it is possible to secure our future financial situations. So go ahead and start saving.
Very informative indeed
Wonderfull insight…