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How to save money in 6 steps

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How To Save Money In 6 Steps 47 – Live Great – Great Eastern Life

Deciding you're going to save more money is the first step to achieving that goal. What you need now is a strong game plan to reach your target. Here's how you can create one in just six steps:

  1. Know your priorities
    So you want to save more money? To ensure that this isn't just wishful thinking, you need to identify your financial priorities first. Why do you want to save more money? Are you buying a new flat, paying off your credit card debts or planning to start a family? Make a list of short-term and long-term goals and identify the most important ones that you want to accomplish this year.

  2. Set goals you can manage
    Now you know what your goals are, time to make a plan. The key is to set yourself specific and realistic targets. Don't make promises to yourself that are too ambitious. Create a checklist and break your goals down into manageable tasks. You might also find it helpful to set yourself a time limit to accomplish each of them. For example, if your goal is to clear your credit card debts, save a specific portion of your salary each month for this purpose. In fact, why not set up a separate savings account just for your goals? This way, you can keep track of your progress easily.

  3. Draw up a budget
    A common method is the 50-30-20 budget that allocates 50% of your take-home pay to necessities (such as groceries, utilities, insurance); 30% to lifestyle expenses (personal "wants" like vacations and shopping trips); and 20% to financial priorities (for example, savings contributions and debt repayment). When drawing up your budget, go over your expenses from the previous year so you can identify the areas that need trimming.

  4. Review it regularly
    A budget review isn't just something you do at the beginning of the year. Go over your expenses every few months to see if you're on track and whether there are any areas that need attention. If you want help there are a number of apps that let you monitor spending including Toshl Finance, Money by Jumsoft and MoneyWise (which is Android only).

  5. Be creative about saving
    There are a lot of creative ways to save! For example, if you are savvy in arts and crafts, you'll enjoy coming up with funky ways to make your own Christmas decorations, or recycle kitchen paper rolls to make toys for your kids. Who says you have to spend money to have fun?

  6. Reward yourself
    Remember to give yourself a treat (yes, this is allowed!) every time you meet a goal. This will make the experience an enjoyable one and motivate you to accomplish the rest of the resolutions on your list.

Now that you've learned the how there's no holding you back. Fire up that laptop and start taking a closer look at your bank account.

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