The following is an article “Welcome 2020 With an Effective Savings Guide” by Marc Primo.
This New Year, most of us are geared to prioritize ourselves and our passions while living our best lives. We start making new lists for travel, educational courses, or purchasing new things. It truly is nice to dream but for all of that to happen, we must first wake up to the reality that we have to save money.
For most of us, saving up can be quite a challenge considering today’s inflation and the incessant rise of market prices. Unfortunately for some, salary and debt takes up much of what they earn and drains their bank accounts to zero.
As we welcome 2020 with brighter prospects, all hope to save money is not lost if you just have the discipline to follow these simple tips every month of the year.
Set a goal and make a plan. The first step to saving up is setting a realistic financial goal that you know you can achieve for the year. Don’t shoot for the stars just yet and limit your expectations to what types of temptations you can resist spending your money on. If you want to save up for a holiday or some annual gifts, try to secure a good three months of your salary as an emergency fund before you start saving up for your extracurriculars. Start with short term goals and put down on paper how you can cut back on expenses during the early months.
Part of coming up with an effective savings plan is analyzing your monthly income and figuring out if you can spare a portion for your savings. Check your credit score and reports so you can find a way to improve them because failing to be religious about keeping your credit healthy can ruin all your plans to save up in just a few months.
Figure out how to deal with debt. For many of us who have acquired debt, there are many debt repayment methods out there you can try to keep the money you borrowed in check. The Debt Avalanche method suggests you pay off debt with the highest rates in interests first, while the Debt Snowball method suggests otherwise by paying off lower interest rates first. Both have their benefits however and depends on which one you are more comfortable with. The Debt Avalanche method will help you save more money over time, while the Debt Snowball nurtures your motivation over time to settle your debts. All it takes is the proper mindset on how to you want to deal with money you borrowed.
Be conscious about your budget. We all know that in order to save money, we have to spend less and that means making a few changes that can hamper our lifestyles at the moment. Don’t focus on death-defying changes and stick with what’s realistic for you like cutting back on junk food or coffee breaks. Alter your cutbacks every month to make things easier because there’s really no reason why should live like a hermit just to save money you intend to enjoy eventually anyway. Apply some smarts and strategies when dealing with your month by month budget and focus on minimizing expenses in the household like resorting to DIY repairs instead of replacements or practicing energy-saving methods for cooling, heating, or lighting. There are many alternatives for entertainment on free TV so maybe you can do away with your Netflix subscription for now and while you’re at it, try to cut back on food by going on a healthy diet. There’s always a win-win situation for you when you try to cut back on budget and apply more determination.
Saving money this year can be easy if you are really hell bent on doing so. Trying to get some extra income by doing sideline jobs or engaging in handicraft selling can also help you achieve your money goals in no time. All it really takes is a positive mindset to overcome the challenges and the more you practice these habits, the more you get closer to financial wellness.