The toughest step in saving money is often getting started. We’ve outlined an effective guide that will help you imbibe a realistic saving habit in order to save towards your short, medium and long term goals.
1. Track your spending
Figure out how much you spend each day and keep a total of all your expenses. This helps you know where you can cut back on if necessary.
2. Add ‘savings’ in your budget
Organize your tracked expenses into a workable budget – which should outline how your expenses measure up to your income. This way, you can plan your spending accordingly. Aim to save 10-15% of your income each month.
3. Set a savings goal
Begin by thinking of what you might want to save for such as a vacation, new car, wedding etc. Then find out how much you’ll need and the amount of time it may take to save up the money.
Set small, achievable goals – and when you hit them, you’ll get the boost to save for even bigger goals thereby making the saving habit stick.
4. Prioritize your goals
Learn how to prioritize your savings goals to enable you understand where to start saving. For instance, if you know you’re going to have a society wedding or get a Masters degree in two years’ time, you need to start saving money for that now.
5. Choose the right saving vehicle
Depending on the duration of your goal, you should explore saving options that can help you hit your goal. For short term goals, you can consider:
- Saving account
- Stock or mutual funds
- High yield investment (Fixed Deposit, Treasury Bills, Federal Government Bonds, etc)
If you are looking for a trusted financial advisory services company with whom you can save/invest, we offer the following types of accounts
For medium to long-term goals consider:
- Securities like stocks or mutual funds
- SIRA – SAMTL Individual Resource Account
- SHYTA – SAMTL High-yield Trust Account
6. Automate your savings
You can choose how much you want to transfer and to where, and issue a standing order for your bank to make a direct deposit as soon as your salary or income enters your account. This way, you won’t be tempted to use the money on other expenses.