One of the most worrisome situations one can face in their lifetime would be facing a crisis and not having any savings at all. This is actually the situation of many individuals. Most people live from paycheck to paycheck and have nothing set aside for rainy days. When an emergency comes along, they would need to take out a loan and end up paying high interest rates. However if everyone would just make it a habit to put aside some money on a regular basis for their savings, then all these problems can be eliminated. In order to avoid this situation from happening, here are some ways on how you will be able to set aside some substantial funds for your future purchases or emergencies:
Map out your strategy
Have clear cut goals. Being wishy-washy about your financial plans would only lead to half-baked plans. The more specific and precise you are about your plans, the better. Write specific plans on how you will be able to put aside money every month. Create your monthly budget and include the amount which you will set aside for your savings. The amount you have pre-set for your savings should not be touched under no circumstance. However be realistic with the amount you assign for your savings. Always remember this formula: INCOME (minus) SAVINGS = EXPENSES. A lot of people often spend for everything else before setting aside for their savings. Make sure to set aside at least 10% of your income for savings. Then just make do with the remaining amount. Cut down on unnecessary expenses and you will see that you will be able to budget everything well while setting aside money for savings.
Create other means of income
In order to create a safety nest for your future, it is good to look into other opportunities for added income. If you are savvy in the kitchen, then you might want to try your hand at selling your baked goodies. Start off with a home based business. Once you have established a solid clientele, then you can slowly sell your wares at fairs. By creating another avenue for income, you will definitely be able to save up a good amount of money.
Be consistent with your saving habits
Always be consistent with your saving habits. Make sure that at least 10% of your income should go into savings. If you are able to add more ways for income generation, then you should be able to put aside up to 30% or 40% of your income into savings. But just make sure that you do allot a part of your income for savings. You should be very disciplined about doing this monthly. Just decide on the percentage you are to allot every month. Should you decide to put aside 10% monthly, then you can put aside 5% every payday (for those who receive their payday bi-monthly). That way you will get into the habit of saving first before spending.
Saving every payday is a good start. But it is not enough to be able to save a substantial amount of money for rainy days. You need to invest money in order to make it grow bigger and faster. That way you will reach your financial goals at a faster rate. Instead of placing your money in accounts that accrue minimal interests, place them in long-term time deposits, mutual funds or securities. It is also good to invest in real estate as properties only appreciate as time passes by.
Plan for the future
Always prepare yourself for anything that might happen in the future. Remember that your current source of income might not be applicable years from now. So it is always good to have other options. Always keep your eyes open for new opportunities. It might be a new job or a new business venture. By entering something new, you open up more possibilities for better savings.
Saving is never easy. It takes a lot of discipline and determination to set aside a bit of your paycheck for future use. But always remember that this is for your future. You will eventually reap the benefits of your sacrifice. That way you will never need to worry in case you face any emergency.
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2nd image by Phanlop88 / FreeDigitalPhotos.net
3rd image by Cooldesign / FreeDigitalPhotos.net