We all have good intentions when it comes to saving money, right? We tell ourselves we’ll start saving once we reach a certain milestone. Like when we hit a specific age, get a raise, or when Johnny (finally) moves out.
But in reality, you’ll only start saving money when you develop healthy money habits. Your future needs become more important than your current wants. A lot of times, our goal to save money isn’t a big enough priority to delay the purchase of that new smartphone, kitchen table or TV. So we spend our rands away—or worse—go into debt to fuel our latest bout of “wants.” That debt then turns into monthly payments that control our paychecks—and our lives.
Sounds overwhelming right? It doesn’t have to be. With a few Tips for Budgeting and Saving Money, you’ll be on the fast track to saving money in no time.
Have a Spending Plan
The very best method to saving money is to create a Spending Plan or a Budget (learn how to make a budget). With a budget you figure out what your income is and what your expenses are. Once you know these two things, you can look for ways to reduce your expenses. Or increase your income to allocate an amount of money that you can afford to save.
Put Your Budget to Work
Once you figure out how much money you’re spending and where you’re in a better position, take the necessary steps to put your financial future front and center. Begin with these Tips for Budgeting and Saving Money.
Start by cutting spending on items you don’t need. For example, do you need a R35 coffee every morning? Could you make do with a smaller, older car? Instead of an expensive vacation, would you be willing to try a stay-at-home vacation?
These types of choices are very personal, so there’s no right or wrong answer. But laying them out on the table can at least help you understand your priorities and some of the options you may not have realized you had for saving money.
Pay Yourself First
Rich people save first and spend what is left over. Poor people spend first and save what is left over. – Robert Kiyosaki
When you pay yourself first, you should set up an automatic way of doing this so that you don’t even have to think about it. You can get your employer to deduct a certain amount and put it in your retirement plan. Or you can set up automatic transfers with your bank (either online or at your local branch).
Most people who use this method find that they very quickly get use to living on a little less. Soon they don’t miss the amount that they are paying themselves in their savings account. When you forget about automatic savings and let them grow, amazing things happen. By saving R100 a week turns into R5,200 a year. Now if someone did this over a lifetime, they would get some fantastic result.
Hopefully you can see how easy it can be to accomplish big things with just a simple automatic setup where you pay yourself first.
Say goodbye to debt.
Monthly debt payments are the biggest obstacle to saving money. Debt robs you of your income! So it’s about time you get rid of that debt. The fastest way to pay off debt is with the debt snowball method. This is where you pay off your debts in order from smallest to largest. Sounds kind of intense, right? Don’t worry, it’s more about behavior change than numbers. Once your income is freed up, you can finally use it to make progress toward your savings goals.
14 Day Financial Detox Challenge
A financial detox is the process of giving your wallet some room to breathe. It’s pressing reset on your spending habits. And it’s being more intentional about how you view and relate to money
For some people, keeping things really simple works best. Ideally you should have:
An emergency savings account
At least one savings account for major purchases (Sinking funds)
A retirement savings account
If this is too much for you, get started by putting your money into one savings account. Then grow your savings from there. You can put money aside on a regular basis for a down payment for a house, a car, or for your retirement.
Where to Find Money to Save Each Month
Some things are easier said than done—like saving money. So you want to save money, but where do you find money to save if you don’t have anything extra right now? Here are some great places to look:
Get It from Work
Raises at work When you get a raise, put the extra money you are now earning in the bank. You lived on less before. Do you really need these few extra rands, or does your savings account need them more?
Bonuses from work If you get paid a bonus, bank this money as well. You don’t need your bonus for living expenses because it is extra money that you can’t count on. That’s why it is a “bonus” to your normal wages. Bonuses are perfect for saving. If you need your bonus for living expenses, you probably have other financial challenges that need attention first.
Overtime pay from work In some jobs you can volunteer for extra overtime. Consider working a little overtime each week and then treat your overtime pay as something sacred and save it in a special account.
Extra large commission If you get paid commission for your job, consider saving a portion of any extra large commission cheques. It is so easy to blow money and then not know where it went. Use some of your extra large commission cheques to create something you will remember. A nice retirement, a comfortable home, or something else that you would like to save for. Use your savings to create a reward for yourself that will last.
Start Saving Money
You can stop the cycle of living paycheck to paycheck with a simple secret: Make a budget before the month begins. A budget is all about being intentional. It helps you create a plan so you can see where your money is going and find out how much you can actually save each month. When you make a budget, you’re giving every single rand a name—or assigning it a job to do—before you save or spend it. Remember: It really doesn’t matter how much money you make—it matters how you spend and save the money you make. Implement these Tips for Budgeting and Saving Money.
Ready to start saving and reaching your money goals?