We all know the importance of saving yet some of us still don’t put aside money every month. Saving money forces us to spend less than we earn and accumulate money for the future. So, if you haven’t set up a savings account yet, or if you have been inconsistent with putting aside money every month, you need to change your spending habits. Here are a few questions you should ask yourself:
What am I spending money on?
Once you know what you’re spending money on, you can create a budget for your necessary expenses and avoid wasting money on things you don’t really need.
Make sure you create a proper budget. It must include all your debt payments, utility bills, grocery expenses, petrol expenses, car payments, etc.
What budget changes should I make?
Once you have worked out where all your money goes every month, make small changes to your spending habits. These changes may include cutting the DSTV cable, if you have a baby, using reusable instead of disposable nappies, avoiding takeout meals, taking homemade lunch to work and buying certain foods in bulk.
What are my most important expenses?
Your most important expenses are your monthly bills, including your credit card payments, utility bills, school fees and medical aid fees. However, putting money into savings is just as important as making sure all your monthly bills are paid every month. Some money is better left unseen; therefore, you should automate your bills and savings. By automating your bills and savings, you won’t miss any payments and will force yourself to save monthly.
How do I set up a savings account?
You can set up a savings account at any bank. You will have to look up the terms and conditions for opening a savings account at a bank. Some banks offer interest on your savings and have a fixed period where you cannot withdraw any money; this is ideal as your money will grow and you won’t be able to spontaneously spend your savings.
How much money should I save each month?
This depends on your short-term and long-term reasons for saving. You should save at least 20% of your salary every month. This money should go towards your retirement, an emergency fund and other future expenses.
Did you know you can ensure you have enough money for essential living expenses while paying off debts? Contact Debt Rescue for financial help.