The Importance of Saving and How to Come Up With a Proper Monthly Budget
Did you know that saving money is the most important thing in our lives? Yet saving money is one of the most difficult tasks to complete.
Are you one of those who spend anyhow and wish to improve? It is time for you to save and have a better future.
As human beings, we are surrounded by lots of things that influence our daily living and spending. It is very easy to give in to the temptation of spending. But all it takes is discipline.
Why Saving is Important
Most people do not save because they are comfortable with their current financial standing. They have enough to feed their families and cloth them, enough to spoil their loved ones and live lavishly. The big question is, have you ever thought of your life after retirement? Have you would live your family if you died today? What if your business went down the drain?
The money you have now may be enough, but not more than what you could get from saving.
Saving has benefits beyond imagination. Most billionaires you know around you were not born billionaires, they are self-made billionaires. A good example I could give of billionaires who came from zero to the most important is the Medici family in Italy. The Medici climbed to the top from being labourers to bankers of the pope. At some point the pope even owed them.
What Is The Best Way of Saving?
The best way to save money is to save in investments. It is also a good way to earn from your savings.
Have you ever heard of a saying that goes; ‘let the money work for you.’? If you have then now it is time to know what it means. If you have not heard it, then this is your lucky day, you are hearing it for the first time and finding out the meaning.
Let the money work for you simply means getting money without sweating at all. The only things you need to do are saving enough and investing wisely. I will talk more about saving in wise investments on my other post about cooperatives. After your investment, other people will do all the working, and at the end of the year, you get your share from the profit and your investment still remains secure. Your money has worked for you. If you want, you could be investing your profits on other things while only using your salary to live. Imagine how much wealth you would have after retirement.
If you earn a regular income, it is even best to discipline yourself to put aside a certain amount monthly. And if you happen to stumble across some money within a month, you could condition yourself to get at least ten percent from that money and add to your savings. You will be surprised how powerful that strategy is.
If you do not have a regular income, don’t stress, save according to your capabilities.
Never ever touch your savings despite what may be on the ground.
Most people are set goals for themselves; they may want to buy a gadget, a house, a car, etc.
To save money successfully, you need to set goals. You may set a target for yourself like saving money for a certain period; maybe for eighteen months, two years etcetera. Or you may even set a target of a certain amount and save until you reach it.
Saving is great, but saving without investment will only keep your money, not grow it.
How to Come Up With a Disciplined Monthly Budget
A budget is an estimate income and expenditure for a set period of time.
Budgeting is a key factor in saving. You must know your monthly usage of utilities and groceries. If you don’t, you should be more attentive from now onwards.
We have monthly bills, these include; rent, electricity bills, water bills, and for others, they may have internet bills. Try to minimize your usage and take note of how much you spend. Budget for your groceries and other necessities. Do not buy anything outside your budget, no matter how less costly it may be.
ü List down all the things you need for the first month of your saving journey. This includes utilities.
ü Make a copy of your list and stick it somewhere in your room or diary.
ü After you are done with your shopping, go back to your list and compare what you bought with what is on the list. Tick for the correct things you spent on. Cross out the things you did not buy with a single line and add the things you bought but were not included on your list with a different color pen. (Do not lose your list. If possible, give it a number.)
ü On your the second month, repeat the above steps without checking your first list. Do this for your third month, too.
ü On your the third month, after all is done, compare your first, second and third lists. Note down the similarity and discard the rest. This is all to find the things you really need and things you can go without for a month.
ü Congrats, you now have a disciplined monthly budget.