Dreaming about prosperous life in the future? Imagining lots of money in your bank account, going on expensive holidays? What about building its foundation now?
Making a lot of money is only half the battle, it will not help you reach financial wealth; one of the most important things is to be able to save and make proper investments.
It is really hard to keep saving money, so let us take a look at some ideas how to succeed in it.
1. First save, then spend
On of the most applicable principles reads “save before you spend”. Try to make sure that you direct a certain part of your monthly salary to savings and investments. That means the money from your bank account is automatically transferred to a certain savings tool, e.g., mutual funds weekly or monthly, making use of the so-called recurring deposits.
As soon as you you have made a monthly deposit, you may feel free to spend the rest on daily necessities and even more. Every cent saved will have multiplied into more money.
There will be no temptation to spend: rent, and insurance will be automatically deducted from your bank account.
2. Outline your financial plans
Set a goal. Decide on your financial priorities. It might be either saving up in order to buy some property or an automobile you have been dreaming about for ages, saving up for a holiday of lifetime or paying for your children’s college education. While the goal is of a personal character, the ways to make your dream come true are accessible to everybody and depend on whether it is a short-term plan or a long-term one. Consider mutual funds if you opt for a long-term plan and take into account recurring deposits or debt mutual funds in case of short-term needs.
3. Take control of your budget
Try to keep your finger on the pulse of your finance every month. Are there any expenses you can easily do away with? Set your priorities: what is essential when it comes to spending? It is advisable to divide your expenses into necessary ones, such as rent, for instance; occasional (it might be medical visits) and the so-called discretionary ones, such as a night out clubbing. Keep down discretionary expenses and put your investment needs first. This simple strategy may result in saving you lots of money over a certain period of time.
4. Consider alternatives
Let us consider the following example: you spend a certain amount of money on a holiday that could have been put off and miss the opportunity to make the downpayment for the car you have been dreaming about. Having made one choice you miss the chance to make another one. It does not mean, of course, that you have to stop buying things you desire, it is just about being careful about your opportunity costs.
5. Avoid falling into debt
Avoid falling into debt. It might be an extremely difficult place to scramble out of. Make sure you do not spend beyond your means as it will result in deeper debts. Be disciplined and make a commitment to keep to your saving plan. Concentrate on your repayment plans and do not borrow more personal and payday loans in order to pay back your previous ones. Take control of every purchase of yours so that you do not make any unnecessary spending. As simple as that. It works. Dream big; set priorities, stick with your plan, monitor your expenses and you are sure to reach your saving goals.