Saving can be pretty challenging for most people. When you’re young and carefree, it’s not easy to understand the importance of money. It also doesn’t help to have friends who spend money carelessly on clothes, shoes, bags, and things that don’t have much value.
Many young individuals don’t value saving money primarily because their wants and needs are provided. However, life is full of ups and downs- it’s vital to prepare for the rainy days.
Once you step into the real world, you will understand how tough it is to generate income. In addition, you’ll learn that life is unpredictable- losing jobs, health problems, poor relationships, these are just some of the things that will make you question life.
Without savings, it’ll be hard for you to get back up and live a comfortable life as you age. People who learn to save early have enormous advantages as they can deal with many life problems without worrying about money.
How To Save Money
Take advantage of your youth and save money while you’re still debt-free. While you may already know how to manage your finances, here are some tips to help you make the most out of saving.
Save before spending.
Whenever you earn, whether it’s from your salary or small business, make sure to allot money into your bank savings account first before spending. For starters, allocate 15% of your income into your savings, but many young individuals tend to save more than that.
If other people provide for your needs, or you live with your parents, you can use that as an advantage to save even more. Remember that saving money early brings in more significant rewards in the future.
Make a deal with your parents.
Many parents would gladly help their children save money, especially if they put it in an account they cannot easily access. If possible, make a deal with your parents. Here’s how it goes: Your parents or grandparents will match the amount you save. For instance, if you save $50, they need to add another $50.
Budget your money.
Budgeting your income is the initial step in saving. You need to know how much you spend every month on basic necessities to know how much you can save. Not everyone has the luxury to save a lot of money. Save as much as you can but make sure that your needs are met as well.
Categorize needs vs. wants.
Saving money is pretty challenging for young individuals because of temptation- colleagues traveling around the world, friends with designer bags, pressure to get a brand-new car, and the list goes on and on. It’s easy to fall into temptation and indulge yourself in “wants.”
To ensure that you’re spending wisely, categorize your needs and wants. Prioritize the things you need like groceries, rent, and bills before spending money on a luxury. There’s nothing wrong with rewarding yourself with something, but you have to be wise in doing so.
More Tips For Bigger Savings
- Avoid carrying a lot of cash. Carrying cash can encourage you to spend out of impulse. The best way to avoid it is by preventing yourself from carrying too much cash in your pocket.
- Savings account with interest rate. Don’t just open any savings account. Make sure that it offers a reasonable interest rate so your savings will grow.
- Don’t buy things you don’t even need.
- Set financial goals. Whether you plan to be a millionaire in the future or travel the world as you retire, setting financial goals will help you stay on track. It will be your constant reminder to keep saving.
- Save coins. Don’t toss around coins in your house. If you don’t like coins, put them in a jar and deposit them in a bank.
- Stay motivated. The best way to stay motivated is by setting goals. When you have plans, you will never get tired of grinding and working hard. Of course, there will be bad days, but don’t let these days disrupt you from achieving your goals.
As we all know, the key to successful saving is by starting early. Saving money while you’re still young is a good practice so you can enjoy your retirement days. Besides, learning to save as early as possible will teach you the value of money and how to be responsible in managing your finances, which many adults fail to do.
You cannot develop good financial skills overnight. It’s a skill that you develop as you age and mature. When you experience the hardships of life, the more you will understand how vital it is to be wise in spending money.