“Saving” and “investment” are two recurring words in the financial sector and in the lives of average persons. They are both essential practices in life, as they are considered the best ways to prepare for unforeseen circumstances.
Dealing with money, without saving or investing could lead to monetary issues like bankruptcy.
We recognize the importance of these two practices; hence, this article gives an insight on ten (10) ways to save money and make more investments in order to help you practice what has always been preached.
1. Develop a budget: This is the most important process; hence, one that you should begin with. Make a budget and stick to it. Your budget should be realistic and tailored to your current financial situation. Be intentional about this up to the last penny you want to save.
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2. Read and understand finance concepts: Another important step to saving money is to re-orientate yourself by removing wrong ideologies or perspectives about savings. Many grew up with poor saving habits which are now a part of them. A simple takeaway will be to restructure your mindset today.
3. Your profit is not your money: Funny, and you may ask, “Is the business, not mine?” Quite truly, the business is yours, but the sooner you know that there is a difference between your money and your business’ money, the better. That is why you should allocate a particular amount that serves as your salary, from the business, once you have gained enough revenue. That way, even if you are not doing okay, your business is perfect.
4. Track your spending: Spending is one of the easiest things to lose track of, especially since it affords your wants and not so many of your needs. Be intentional and be conscious of your spending.
5. Avoid credit payments: This is often the fastest way to get into debt. It covers your immediate cost but adds a minus to your future paycheck. Only make credit purchases, when absolutely necessary.
6. Filter needs from wants: We all have no choice but to spend money on meeting our basic needs. For wants, however, you can choose to cut them off. Identify, and cut off your wants, to save more today.
7. Do not take financial aids (loans) when you do not have to: Loans are helpful when one has many payments to make and other financial needs that need to be met. Taking up loans at any time for any reason is a certain way to living a financially unhappy life. One should note that every loan you take is equivalent to taking your earnings (salary or business profit) in advance and you will be working through the next months to pay back. On that note, except it is for a profitable need, one should avoid taking loans.
8. Analyze and cut costs: If you pay closer attention to the financial aspect of your life, you would realize that some expenses involved you paying for things that you never needed. Analyze all your regular payments, and trim or remove those that only seem essential, but in reality, are not.
9. Review all insurance policies: Insurance takes its share from your paycheck before it gets to you. Reviewing the payment coverage for all your plans is a good way to cut costs. You might be wasting money or paying a premium for inadequate coverage.
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10. Always review expenses: At the end of each month, review your expenses to see the ones that you could have avoided. As such, you can work towards avoiding it later.
Saving money is a conscious effort and not a switch that can be flipped in a second. You have to be intentional about it and set realistic goals with time frames and limits. However, you can only invest the money you have, hence the reason for saving. It is high time you get started. Reading and knowing how to go about it is not enough. It is important to take action, and the best time to start is now.