Developing a Saving Culture

Developing a Saving Culture

Saving is a very useful culture towards achieving financial health. There are many people who want to save, but it is actually very few who end up saving. This is because saving is about starving yourself and forgoing some pleasures. However, when you master the art of saving, you become financially free, debt-free, and you can achieve all your financial goals. In this article, I will teach you 7 ways on how to cultivate this saving culture.

 

  1. Assess Your Financial Situation

This is the first step before you can start saving; assessing your financial health. This helps you understand the direction you are headed financially and why you are where you are. You will know in which areas you have been spending way too much. You will evaluate all your income and your expenses.

2. Make a Budget

A budget is very important in prioritizing your needs and wants. It guides you on where you should be spending your money and where you should not. Satisfying your wants instead of your needs is very dangerous to your financial health and it will prevent you from saving. To make a budget, first assess your situation, your needs, your family dependencies etc. Then set your financial goals. This is done by prioritizing your needs. Set out all the sources of your income to see how much you make in a month. Estimate your expenses by creating a fixed and variable budget for the expenses. Balance between sum of all your income and the sum of all the budgeted expenses to find if there is a surplus or deficit and adjust accordingly. Put your budget into practice and finally assess to what extent your budget has been a success by comparing the budget to what you spent that month.

3.  Keep Track of All Your Spending

Your spending habits are very important in determining whether you will be a successful saver or not. Keeping track of what you spend your money on daily will help you realize where your priorities are wrong. If you find yourself involved in overspending and impulse buying, look for ways to do away with these habits as they are toxic to your saving culture.

4. Have a Target

Having a savings target helps you get motivated and focused. It is advisable to have realistic, achievable target within a certain set deadline.

5. Avoid Debts

It is important to have financial freedom by avoiding debts. Learning to live within your means is a priceless skill that will help you be contented with what you eran and also find something to put in your savings account.

6. Have an Emergency Fund

A lot of unexpected situations emerge that require us to dig a little deeper into our pockets. We can never control emergencies, and so the best way is to be ready in case they do arise. It is advisable to set aside 5% of the income for emergencies. You should, however realize that normal savings are different from emergency savings.

7.  Set Your Mind Towards Saving

Being focused and having a made up mind on saving is very important. Having the urge to save propel you from the inside rather than tolerating it is very important. This means that even when you have extra money at the end of the month, you would rather save than spend it unwisely.