You don’t have to live paycheck after paycheck.
It forces you to live in a manner you are not meant to.
Your salary makes a significant difference in the quality of life you live. It is understandable. But what if I tell you that your salary is meant for saving more than spending
Don’t get me wrong! Read that sentence again. I wrote ‘meant for. I am not saying that you earn just to save. You can prioritise saving more than spending.
Both businesses and individuals owe much to good savings. It can manage emergencies. You can make better life decisions. You can invest freely but smartly, too, considering the efforts you put in to save money.
This is where I would like to bring your attention to the part of savings.
Do you think saving money is enough?
Increase Your Savings to Make It Grow
Of course, collecting money and saving it for the future is okay. However, you don’t want to make your saving statistics into something like standing water. You can simply make it grow.
Why do you think people take out a very bad credit loan from a direct lender? Is it because they need money in this condition so intensely? Or do they also want to develop their credit scores through it?
Well, many borrowers pay their pending credit card payments using this money. They also then repay the money in time to their lenders. Both of these transactions mentioned improve the credit score, and the borrower enjoys their privileges.
Similarly, you can use your earnings not just to save money but to increase those very savings.
Here is how you can do that:
- Try the Envelope Method
- Learn Cash Flow
- Keep Records of All Your Expenses to Maximise Savings
- Make Buying a Necessity…Not a Pleasure
- Periodic Savings Goals? That’s a Good Idea
- You May Work Part-Time/ Freelance
- To Conclude: Make Another Account only for Savings
I reckon you are already excited to learn more about them. Read below:
1. Try the Envelope Method
I used it because my father taught this to me. I found it pretty interesting. It made me organised.
More organised than you think…
Although it sounds old school and you may not get savings from it directly or can increase it initially, you can find how useful it is later.
This process means you have to make envelopes for each section of expenses. Take out all the money from your salary and put money in each envelope dedicated to particular costs.
You might want to use part of your salary to save. You can keep the amount you want to save in the account and withdraw the rest that is meant to pay bills and buy things which are necessary.
For this, you must make strong calculations so that you don’t head back to the bank to deposit extra cash or withdraw again.
2. Learn Cash Flow
Who says cash flow is only for business?
It’s for everyone. You, me and everyone else!
Cash flow defines the condition or the status of your financial management. Consider it as the lifeline of your personal or commercial finance.
Start learning! Track your earnings and expenses to define what you save. Understand the nature of your spending. Identify loopholes if you can.
This will help you make changes in the pattern of your financial management.
Yes, cash flow would initially seem a little difficult or complex to understand. But, with time, you can get the hang of it.
3. Keep Records of All Your Expenses to Maximise Savings
It is one of the most valuable ways to maintain your financial life.
It is true that you are working at your best pace to buy things and then to save money. From the coffee cup you purchase to the utility bills you pay every month, all these things should be written down, recorded and calculated to contribute to the cash flow.
You can use a worksheet to write down these expenses. You may also make a digital worksheet on your phone or tab to keep track of income and spending.
Or else, simply using an application like Mint would do you great.
But why are we focusing on tracking expenses and how that may be able to increase our savings?
As a matter of fact, you need to look deeper. If you put your details down on a sheet, then you can define your expenses to understand the quality of life you want to live. Making adjustments in these matters can aid you with saving money at the end of the month.
That does have the potential to save you some cash.
4. Make Buying a Necessity…Not a Pleasure
Buying is a thing we do get necessities and not for pleasure.
When you look upon purchasing as a means of releasing some dopamine and keeping yourself happy, then you can say you are using money in a short-term pleasure-seeking project, which may not offer you any meaningful privileges.
So, you don’t need that shoe you eyed at that store a week ago.
You need to buy those things that are necessary and unique in your life. Find out what real-life values these products cultivate in your life. In that way, you stop impulsive buying and start making more money.
Increase your savings using that.
5. Periodic Savings Goals? That’s a Good Idea
You might say you saved around half your income in 6 months. You have achieved your goal. Now that you have become the winner, you plan to repeat the same.
But that does not bring that growth curve in your savings. Sure, it is consistent enough. But in order to have a better life, you need to save more.
So, the next time you want to save an amount comparing your salary, make sure that amount is higher.
For example, save 75% of your salary by 6 months the net time.
6. You May Work Part-Time/ Freelance
In websites like fiverr or Upwork, you can easily get an online job to work from home.
In order to make the most of it, do your own work-from-home setup and get going in the world of freelancing or remote jobs.
I have seen many people on benefits say that they need an on benefit loan from direct lenders in the UK to start off with their freelancing work.
On asking them why they thought of working even at the time they earn money from benefit programs, they answered me a simple thing: “To increase our savings.”
To Conclude: Make Another Account only for Savings
Why do you need the piggy bank? Why do you even gift it to your children?
To dedicate an account for savings and savings only matters a lot.
Think of it this way. You don’t get to save in your primary savings account in the bank only. You do deposit cash there. But you also withdraw from it, don’t you?
Instead of doing so, keep on investing in it constantly.
Your financial institution, too, may reward you for having a steady and consistent goal.
Oh yes, if you do have trouble starting off with the savings account now, you can always get some money from direct lenders.
But whatever you do, keep in mind that you have to keep growing.