One’s financial priorities might change with time to time but a good saving plan will last for lifetime. Like in your teens you might save money for cars, in your 30’s you might save money for your kids & family, in 40’s & 50′ you are more focused towards retirement. But to achieve any of these goals you need a solid saving plan. So in this post we are not going much deep in creating the best saving plan but providing 2 basics tips for establishing a savings plan. Here we go:
Pay yourself first:
No doubt you’ve heard that expression on numerous occasions, but still aren’t quite sure just what it means. Do you have mountains of debt that keep you awake at night and stressed during the day? Are you living paycheck to paycheck and feel like there’s no way out? There is a solution. It’s very simple, but requires self-discipline and delayed gratification. Set your mind to accomplishing the goal of getting out from underneath your debt and establishing a savings plan. Start today with these simple guidelines from the experts.
Make a list of all debts:
Include credit cards, store payments, installment loans on your list. Arrange them from the smallest balance to the largest. The goal is to pay off the debts with the smallest balance first. That’s one half of the equation. The other half is the amount to save each month. Financial planning professionals agree that the ideal savings balance is three months of your take home pay. This will be sufficient should you expectantly lose your main source of income.
Small, incremental debt reduction coupled with diligent savings will not only allow you to achieve your goal, but will make savings a sustainable, lifelong habit. Begin with identifying ways to reduce your expenses. Annualized the amount you spend on pricey cups of morning coffee. $4 per day 5 days a week is a over a whopping $1,000 per year. Eating lunch out at $9 a day three days a week is yet again over $1,400 per year. Cutting back on these items in the short term is rewarding yourself with increased savings and reduced debt in the long run. If your family and personal commitments allow, consider speeding up your savings and debt reduction with a part time job on the evenings and weekends.
Not only will you be earning additional money, you’ll have less time to spend. Shop online at discount sites to stretch your discretionary spending dollars. Just as you’ve itemized your debt obligations on paper, commit to doing the same with your savings goals. Break this goal down to weekly increments. The smaller the number, the psychologically obtainable it will seem. Good luck to you.