It’s never too late to develop a habit!
Just like it’s never too late to start saving. However, if you’re like Ashleigh and feel you’re playing catch up or are simply still unsure of the importance of saving and how to do it, here’s a small guide to help bring some clarity.
We save because we can’t predict the future. Having that safety net in place can help you feel financially secure, especially in emergencies. An emergency cushion of funds can be a blessing when life throws its little hiccups your way. You might suddenly lose your source of income, have to pay medical costs or pay out on a hefty car repair. Savings can prevent you going into debt if these costs come your way. Regular saving from a young age can also make life easier when you need to access money quickly for a large purchase further down the line.
Not only that, but savings can also help cover you in retirement. It might seem a lifetime away but setting up for your retirement as soon as you can should only benefit you. These savings can help cover you when you are no longer receiving a working income, and help you enjoy the later years of life in comfort.
But we understand that saving is essentially another cost coming out of your payslip each month, so it’s important that you develop a budget to not leave yourself too short. If you use your net income as a base, this will show what you take home after tax and other dedications you may have. A common mistake people make is developing a budget from their gross income. Budgets are about more than paying your bills on time – they are also about determining how much you should be spending, and on what. It’s hard to implement a system, but there are great benefits of applying simple principles to spending.
Having an app like i-stock allows you to set up direct debits so you don’t even need to worry about arranging your savings once you’ve set your budget. Simply input the amount you’re comfortable with, and it will automatically come out of your account as arranged.
However, if you’ve looked at your income and are still struggling to work out how you can save money, here are a few more things you can do:
- Save any bonus income – Any unexpected money such as a tax rebate. .
- Literally gather up the pennies, save all your loose change, and then deposit that into the bank. It can actually add up to a large amount over time.
- Be a frugal shopper – buy cheaper, non-brand items and save a little here and there.
- Change your habit – Instead of getting your habitual cup of tea en route into work, why not try and change your mindset to making a tea when you get into the office. That money saved can go towards your savings.
- Have a “buy nothing week” every month.
- Before you make any major purchases, shop around and make sure you’ve got the best deal.
At the end of the day, something you will never need to learn is how to spend money. It’s so easy. But saving that dough is tough. That’s because saving is a learned skill and, like most skills, it takes time and repetition to become a habit. However, if money-management and budgeting can become a habit, it will ensure a chance of achieving any financial goals. Read our Rule of Thirds Blog to find out more saving habits you can pick up.