Many of us are good at making money. We work all day long, doing what we love to do, and convert our skills and strategies to excel in our respective professional fields. We invest all of our time and effort in our organization or our own business and get rewarded heavily and appropriately. But when it comes to money management, then that is where the problem begins.
This management is often difficult due to obvious reasons of inflation, flawed budgeting, recession, or a sudden downsizing at the workplace. Global recessions, such as the one that ended in June 2009, take a toll on the organizations and their employees. In such situations, one has to have critical skills to not just survive but save for the future.
The year 2020 is no different; there are challenges of job security, increasing costs of commodities, costly healthcare and difficulties to maintain the standard of living. The need of the time is to become good money managers. If you are also struggling with money management, we are here to help. This article will walk you through the essential tips to stop worrying and start saving.
1. Invest In a Fund
One of the measures to keep ourselves at peace is to keep our money in a safe place. We can always keep our cash with us, but the wiser option is to invest in an authentic fund. This way, the money remains to save while it also increases over time. Many people turn to Self-Managed Super Fund (SMSF) to avail of a long-term investment opportunity that provides benefits upon retirement. The advantage of such a fund is that its members are also its trustees.
2. Get Rid of Debt
When you have persistent debt, your money gets swept away before you even know it. Every time you get paid, whether in terms of salary or after signing a business deal, a large chunk of it might go to clearing off the debt. So, it is important to get rid of the underlying debt as soon as possible through solid planning and persistent efforts. Also, remember that the first step to freeing yourself of debt is to stop borrowing more and more money.
3. Make Your Wish-list
One of the foremost steps to save your money is to change how you spend it. Setting realistic targets and allocating a specific amount for each of them is a smart and calculated way of spending your money. For instance, if you want a brand new laptop as well as replace your car tires, you do not need to do both at once. Every single month, mark only one item on your wish-list that you want so that you are not cash deprived too soon.
Cut Down on Non-Essentials
Unlike common thoughts, it is not the big items that make your money ‘vanish’ before you realize, but it is the smaller things. The amount that you allocate for the rent, loans, or the grocery is usually fixed, but smaller items, such as frequently spending on fast food, movie tickets, or unexpected fuel consumption due to long rides can make your money disappear and spell trouble for your savings.
Shop Wisely
Another major reason for the money drain is spending hastily and without giving it much thought. This happens when you are scrolling the pages on your favourite social media platform and get attracted to the ads of your favourite brands. These are truly irresistible because they are based heavily on your preferences. As soon as you click on one of the ads, it takes you directly to the website selling the item, and before you know it, you have purchased it using the already saved credit or debit card details. If you are facing a credit crunch, refrain completely from online buying and visit the stores yourself if you must.
Save ‘Coincidental’ Earnings
Receiving a gift card or cash as a present from a loved one makes our day and fills our heart with jubilation. But such kind gestures also come with a challenge, which is to save this coincidental money. We tend to spend this money speedily because subconsciously, we see it as something ‘extra’ and want to cash in on the free rewards as soon as possible. But if you think about it, saving some money every time you earn such a reward can help you be prepared for any future monetary challenges.
Set Up a Transfer Schedule
Financial experts suggest setting up an online transfer to another account every time you get paid. These might seem small amounts at first, but the reality is when you add them up after a few months, you will be surprised as to how much money you have succeeded in saving. With this strategy, you might not need to brainstorm ideas or go out of the way just to save a few bucks. You can consider this saving as your ‘rainy day’ account to which you can also turn to in difficult times.
Turn It into a Collective Effort
Humanly and psychologically, things become easy, and tasks seem achievable when we have someone to support our cause. What is even better is that you can team up with a family member or a close peer to save collectively. This may soon turn into a positive competition and allow the two of you to set benchmarks and milestones to achieve the cherished goal. You may, however, want to keep such an activity privy to you and your peer to maintain the confidentiality of your savings.
Final Word
Monetary savings are always difficult to achieve and require constant effort. But following some of the aforementioned tips and remaining consistent in doing so can help you attain your objective. What you should also keep in mind is that your efforts can only be fruitful if you have a tangible and pragmatic plan at hand. Crafting your strategy at the beginning of the month may help you understand your budgetary needs, expenditure habits, and financial capacity. Last but not least, learn to prioritize all your savings so that you do not end up borrowing at any point in time. So, the next time you are planning to go window-shopping or thinking about buying an expensive airline ticket, think again!
