Smart ways to budget your salary and save more
Saving is not an easy undertaking for many people. However, with the right saving tips, you could be able to save more of your income. With many demands to meet and low incomes, cultivating a saving habit can be a big struggle. However, it is very important as it is sometimes the only way you can be able to survive in the kind of volatile and unstable world we live in today.
There are many reasons why you could be finding it difficult to save and some of these could include;
You earn a low income compared to the lifestyle you live; with few jobs and more job seekers in the Ugandan job market combined with a struggling economy, you are bound to find yourself in a job that pays you so little compared to your qualifications and kind of lifestyle you live or would wish to live. It is very difficult to save when all the salary you get is often spent paying bills. However, you can go around this by simply trying to live a lifestyle that your income can handle.
You are in debt; for one reason or another, you could have been forced to get a loan from a bank or a friend that has led you to debt. This means that the extra money you could have saved will go to paying these debts. Avoid getting loans unless it is actually an emergency. If you can avoid this situation it can help you save more.
You spend money on things you do not need; if you do not really need it, do not spend money on it. It is okay to buy a new cloth or a new sofa set but ensure that you have actually planned for it and purchasing it does not encroach on your savings. Buying things you do not need at the expense of saving some money is not always wise.
You do not plan your spending or stick to your spending plan; even when you have bills to pay and new things to purchase, you should be able to be able to save if you plan well and stick to the plan. The reason you may be finding it difficult to save is because you actually spend money on things you did not plan for in the first place, or simply spend money without planning how you are going to spend it.
You have a “live in the moment” mentality; when you are always looking to live in the moment without thinking of what could happen in your future, you often do not care about saving for the future but will often spend all your money the moment you get it. This mentality also encourages you to impulsively purchase things you do not need.
You procrastinate too much; each month, you always say that you will start saving some money the next month but when that month comes, you find a reason to push the saving resolve to the next one. Stop procrastinating, begin saving today.
Despite the hindrances you could face, it is important that you try and save some of your income every month. Saving has a number of benefits such as;
Saving enables you to become financially independent; many people hope to own their own business and not have to work for other people. The first step towards this goal is to save money enough to start your business and maintain it. Without savings, chances are high you will not be able to have capital to help you start your business and become financially independent.
Saving enables you to have extra money in case of emergencies; you or someone close to you could become ill and you need money to treat them. This is where the savings could come in handy when you do not have enough money to spend on medication.
Saving enables you to get that dream car or house you may have been yearning for; many times you could be yearning to get something big that is expensive which could be a house, car to mention but a few. The best way to get money to purchase such expensive things without straining yourself too much is by saving a small amount of money over a long period of time.
Saving enables you to avoid debt; should you have an emergency or want to purchase a new car, you will not have to borrow money from someone if you have your savings. Borrowing money comes with its disadvantages such as having to pay more money in terms of interest rates. The best way to avoid debt is to simply save.
Saving enables you to survive even after losing a job; your company is downsized and you have to leave your job or perhaps you have reached your retirement age and are asked to leave. If you have not saved up any money, chances are high you will find it very difficult to sustain the lifestyle you are used to during that time and might wind up in debt. Your savings should be able to help you get through the situation as you find your footing
Saving enables you to live a healthier and happier life; saving has emotional benefits as well. For example, you do not have to worry about your future or about handling any unforeseen circumstances because you have all that catered for.
Now that you know the advantages of saving, how then can you begin to cut down on your expenses and save more?
Make a budget; it is important to have a financial plan in place that could be long term or short term. This helps you to prioritise your expenses, guides you on how much money to spend and save. Without a plan, you are bound to blindly spend your money and not save any in the long run. A plan directs you and helps you keep within your limits.
Set realistic saving goals; after making your budget, set saving goals that you can manage. For example, you could say that at the end of every month, you have to save at least 10% of your salary. Setting such goals encourages you to save. Be sure to make new and higher goals should be able to attain the set goals to help you grow.
Plan to save first before you spend; the mistake many people make is that they plan to spend before saving some money. Should you do this, chances are high you will consider saving as a non-priority and will not mind encroaching on your set savings. Make saving your first priority and then take care of any other bills or debts you have to pay after subtracting the money to be saved.
Track your spending and balance regularly; knowing exactly what you have spent money on and how much you are remaining with enables you to further plan for the money you have. This helps you not to exceed what you have to spend since you know exactly how much you have.
By tracking on what you spent your money on, you are able to assess whether you really put your money to good use and if not how to better use it.
Have more than one bank account; you could have two bank accounts that is; one allocated to spending and another for saving or you could have more than two that could be grouped in terms of; home bills, savings or transport. Whichever accounts you choose to have, try to ensure you have a strict savings account without an ATM card. Some people go as far as asking the bank to deny them any access to their saving account for some period of time while others have standing orders permitting their bank to take cut some amount of money off their salary and deposit it into their savings account every month. This will further discipline you and help you cultivate the saving habit.
Find more ways to earn extra money; it could be by using your talent to earn money, having a side job, working extra hours or working harder to get bonuses or commission at work. If you can, finding other ways to help you earn money apart from your main job could help you get more money to save.
Live within your means; do not strive to have the most expensive designer clothes or the most expensive car that you cannot afford. Attempting to live your richer friend’s lifestyle could cost you when it comes to saving money. Buy clothes, rent a place and go to recreation places you can afford and will not unnecessarily stretch your budget. Live within your means and lead a lifestyle your income can support.
Spend wisely on food; when it comes to spending on food consider buying groceries and cooking food for yourself rather than eating out. Eating out can be quite expensive yet you can prepare a meal for yourself and save more.
Spend wisely on entertainment; this could be cable television, a concert or going out with your friends. Whatever it is, ensure your recruitment activities do not take up a lot of your income as they are not as urgent. Keep them minimal and within your budget.
Spend wisely on transport; one of the main expenses people incur is transport that could be in terms of fuel costs or transport fares. You can reduce the amount of money you spend on fuel or transport by taking the company van if the company you work for provides it, using a bus instead of a motorbike or choosing hours when there is less traffic to drive your work.
Spend wisely on communication; you could be spending way too much on purchasing call bundles or data when you do not necessarily need it. Be wise to buy cheap airtime bundles if you are the kind that regularly needs to make calls. If you are able to access wifi regularly, there is no need for you to buy daily data bundles. All this can help you save money.
Be careful when choosing insurance; although insurance plays a role in helping many people during unforeseen circumstances, be careful what type of insurance policy you pick and objectively assess whether you need it in the first place or not. For example, if you are the kind that does not regularly fall sick, having expensive medical insurance would not be wise.
Recycle your old possessions and use or sell them; instead of throwing away your old treasures such as clothes or electronics, look at recycling them and reusing them or simply selling them to friends or putting them up on an online store. This helps you to both save and earn more money that could increase your savings.
Control your emotions; some people deal with loneliness or stress by shopping while others are too impulsive and just cannot control themselves from spending too much money they do not have to. Whatever type of emotions drive you to spend more, ensure you are aware of them and find other productive ways to control them rather than draining your income.
If you are an impulsive buyer, take at least 48 hours before you can purchase anything.
Make good use of discount seasons; should you want to purchase things such as clothes, phones, electronics to mention but a few, target seasons when many shops are giving discounts for example during Christmas or Ramadan periods. This helps you to spend less on things you could have spent more on allowing you to save more money.
Say No to unexpected expenses if you can; one of the main reasons you may fail to save is because you continuously entertain unexpected expenses. For example, if someone should ask you lend them some money and you know that it is not within your budget, learn to say no.
Invest wisely; it is not wise to just save money and live it as it is, invest that money and let it grow. This could be in a business or through purchasing shares or money bonds. However, you have to be careful and wise when it comes to investing to avoid losing all your savings.
No matter how little you may earn, saving is not an impossibility. You just have to be disciplined and set your mind to practicing the habit. Do not be discouraged, start saving today!