Quote of the Week: 'Savings, remember, is the prerequisite of investment.' ― Campbell R. McConnell
Saving is emphasized in every personal finance class, seminar or blog, and rightly so. Setting aside money for the proverbial “rainy day” is a wise move as more often than not, the rainy day, eventually comes. Knowing that you don’t need to borrow to cover your emergencies not only gives you a peace of mind but also prevents you from getting into a financial black hole in the future.
Most people, however, struggle to find the extra money needed to save. “Do not save what is left after spending; instead spend what is left after saving” is easier said than done. For most people, we don’t have enough to spend in the first place. So, what are some of the easiest ways to save?
1.Avoid Credit Where Possible.
Financing a lifestyle on credit is setting yourself up to financial struggle in the long term. Even if you are sure about your income increasing in the future, try and curb your use of credit unless it’s necessary. The fees and interest charged on the credit will be saved or used in other, more pressing needs. Instead of swiping that credit card, swap it with a debit card or cash.
2.Cut Unnecessary Costs.
One of the best ways to avoid credit and ultimately save is to cut any cost that is not necessary, especially recurrent expenses.
There are a few ways you can achieve that. One, identify your needs and wants. Then, eliminate all the wants you possibly can from your budget.
Speaking of budget, budgeting is the second strategy you can use to avoid unnecessary costs. Having a budget and following it is a prerequisite to managing your finances better. It helps you balance your expenditure and income, identify where you can cut back and consequently help you save more.
The third thing you should explore in order to cut costs is having a shopping list. This is the best way to avoid impulse buying which, as you might already figure out, ends up costing you a lot of money.
3.Avoid Spending When You Don’t Have To.
Be creative. Instead of buying an expensive gift, try a DIY gift. It’s even more personal and people usually love personalized gifts. Instead of buying coffee every day, try and make it when you can. Shopping? Try the thrift store once in a while. By doing so, you will be making a few savings here and there which will add up to a substantial amount over time. When you have to spend, go for quality. That way, you will always save in the long-term.
4.Save In Interest Earning Accounts.
When you finally have the elusive extra cash where do you put it? The ideal place to save your money is a savings product that earns you reasonable interest after deducting all the costs and adjusting for inflation, and with flexible terms, such as the Zimele Savings Plan.