From Zero to Tangible: 5 tips for growing your savings
Only a small fraction of the world’s population has a savings culture. Most have nothing to show for their work. Should an emergency pop up, most people will not have the resources to weather the storm. Living from paycheck to paycheck leaves little or no room to save anything tangible. The reality of saving from scratch then becomes a daunting task that most people eventually pull out off. The key is to get started, no matter how little. Here are five tips to get you started on moving your savings from zero to at least six times your monthly salary.
Evaluate your priorities
To succeed at anything, defining purpose is essential. After all, “When the purpose is not known, abuse is inevitable.” To this end, it is necessary to understand and identify why saving is significant to you and how it ties to your overall financial prosperity. The best starting point is to ask yourself, “What are my goals in life?” When you have a better understanding of this – short and long term, you’ll see that money plays a critical part in bringing them to fruition. Name that goal – a good family, good house, perhaps a political post, change the world – and money is directly or indirectly part of the success equation. Understanding this is the first part of creating a saving culture. You begin to prioritize what you spend money on and become more strategic by spending on things that further your goals.
Make Small Changes
It’s a trap trying to multiply your savings overnight. There are attitudinal changes that need to happen as you adjust to your new spending habit. Like a drug addict, withdrawal from being a spend thrift would be gradual and not instantaneous. Too many changes at once might force you to your old habits. So, start small and grow from there. It could be as much as reducing the amount of time you eat out in a week and putting the money into a savings account. You just need to identify areas you can make the quickest adjustments and start from there. These small efforts might seem intangible at first, but over time, the savings will begin to be meaningful.
Make it automatic
This can be very useful for salary earners. It involves setting a standard or standing order on your salary account for a fixed monthly allowance to be paid into your savings account. It is worth pointing out here that you should have a savings account dedicated solely to save for opportunities or rainy days. Most companies have a fixed day; they pay salaries anyways, so you can set the standing order to fall on that day. However, I suggest adding a day or two to that day to offset any unforeseen circumstances. As with our advice on starting small, you can equally do that here and increase the monthly amount later on. After a while, you get used to it.
Get other sources of income
If you’re barely making ends meet and your budget stretched, you’ll likely find it challenging to save, no matter the efforts you put in. In that case, and as a matter of fact, for everybody, it’s wise to have additional revenue streams. You can start a side hustle, begin freelance work over the weekends, or start consulting for other businesses in your spare time. The list is endless. The internet has made this easy, and the truth is: there are many options for any skill set. You only need to desire it and put a plan to action.
Last and perhaps the most important tip is to plan. It’s not uncommon for people to be caught off guard by their expenses. It helps to take proactive steps and plan out what you wish to spend in a week and perhaps a month, and stick to it as much as possible. Most times, we have a clue what needs to pay to get through a week, barring emergencies, of course. When you plan, it’s easier to avoid impulse buys and gain better control of your finances.
Savings is vital for your financial prosperity. It helps you take advantage of opportunities that come up and acts as a cushion when life throws you unexpected challenges. Start small, and in the end, you’ll be pleased with your efforts. It will be worth it. Grow your savings today!