Whether to save or spend, this is a dilemma lots of people face on a daily basis. You sure have the impulse to spend all the money you have because “you only live once.” But don’t forget that tomorrow isn’t promised. What are you saving for the future? Do you want to live your retirement years with limited choices? No, right?
You can only reach financial success if you create the right mindset, routine, and lifestyle. As you learn to take control of how you spend your money, you can actually live a better life as you retire.
These 7 habits are a great place to start saving for the future:
#1: Invest Your Spare Earnings
One of the best ways of saving and building wealth is to invest the extra income. The best part is you don’t need a lot of money to take the first step. You can invest in your 401(K) or maybe even start online trading. If you don’t have enough to buy a stock, you can use the micro-investing apps and invest the spare change.
It’s recommended to start investing soon to take complete advantage of the compound interest. Compound transforms relatively small investments into major wealth if you are consistent with using the extra cash.
#2: Track Your Spending
There is no way you can build wealth if you spending more than what you are making. How do you know you are earning more than your spending? It’s simple, by tracking your daily expenses.
There are a handful of apps that you can use in this. They let you keep a record of your daily purchases. It’s a great start if you want to cut back on unnecessary spending.
#3: Automate Your Savings
It’s high time you ask yourself how often you save. If you can’t remember the last time you transferred some funds to your savings account, you need to take a prompt action today. Save at least 20 percent of your earnings. The best approach is to automate your savings. Otherwise, you will just end up spending the amount you planned to save.
As soon as you figure out the amount you can easily save each month, set your direct deposit to automatically sending that particular amount to your savings. The cash will be saved before you get a chance to spend it.
#4: Pack Your Lunch
If you just calculate the amount of money you spend on lunch every day, you will realize a large chunk of your income goes to food. Then there are times you bring home takeout food because you didn’t make dinner.
How great would it be if you save that money instead? Take a step further and plan out your meals. Make sure you pack lunch. By following this single tip, you can save thousands of dollars by the end of the year.
#5: Map out Your Financial Goals
- Hary Eker, the self-made millionaire, says that the reason why most people don’t do what they want is that they don’t know what they want. Unlike an average person, rich people are pretty clear that they want to accumulate more wealth.
Wish you were that clear about your financial goals, too? Then write them down. For example, your financial goal could be to invest in trading and make $5,000 profit by the end of the year. Whatever you do, make sure you are realistic with your goals. However, don’t be afraid to think big.
#6: Get Rid of Your Debts
One thing that can destroy your peace is debt. If you have a debt, target it first. Along with paying the debt, make sure you keep a reserve fund even though it’s little. In this way, if you come across an unexpected expense, you won’t have to use your credit card and fall in more debt. In fact, you can rely on reserve funds to meet your needs.
#7: Know When to Say No
If you are telling yourself there isn’t enough room in your monthly budget to save, that is just an excuse. In fact, if you don’t have enough money to save each month, it is an indication that you are living a lifestyle you can’t afford. Likewise, if you have the “I will save later mindset”, you are fooling yourself.
Saving money is about making smart sacrifices. You will have to say no to a lot of things and make adjustments in your life. You don’t just have to say no to yourself but some friends, too. Let them know about your goal to avoid the embarrassment. Try keeping the bigger picture in mind. You are securing your financial future and it’s always worth it.
Summing Up
You can’t live a stable financial life as you retire without planning for one. And it all starts by saving money. So go ahead, make the first move. You can also start a side hustle and save that money for the future. Likewise, whenever you receive a bonus or tax refund, add it in your savings account. Start little by little and as your retirement days are closer, you will have enough to live the life you always wanted.
