Budgeting can be tough, so we ask experts for tips on how to stop splurging and start saving.
Budgeting can be tough, so we ask experts for tips on how to stop splurging and start saving.
Saving doesn’t mean you have to deprive yourself of the things you love most – after all, who doesn’t love a new pair of shoes now and then? managing your finances is about being able to experience the things that matter to you, so you and your family can enjoy a sustainable and happy quality of life. Here are some easy ways to get started on stashing extra cash away.
Know your assets and liabilities
Write down an inventory of how much you have (assets) and how much you owe (liabilities) and update it at least twice a year, say Ellen Rogin and Lisa Kueng, authors of Picture Your Prosperity: Smart Money Moves to Turn Your Vision into Reality. Having a bird’s eye view of what comes in and what goes out is the first step to better money management.
Make small life adjustments
Our daily spending habits can often accumulate to large amounts without us even knowing. We’re not saying you should give up that morning cappuccino, but take advice from Rachel Johnson, author of Mrs Moneypenny’s Financial Advice for Independent Women, and be mindful that by saying ‘no’ to a few things, you can make huge savings.
Keep a list of your expenditure for two weeks and then review it to see what you can possibly cut out or cut down on. Do the 72-hour test When shopping online, keep items in your “cart” for 72 hours before hitting checkout.
This lowers your urge to make impulse buys. Explains Carl Richards, author of The One-Page Financial Plan: A Simple Way to be Smart About Your Money, “The extra time provides a cushion. We’re not saying ‘no’. We’re simply not giving in to our urge for instant gratification.”
Prioritise your goals
Work out what you want by keeping a Goals List, advise Ellen and Lisa. Start by thinking short-term: What is something you would like to have happen sooner, and which requires some planning? This helps to build your planning muscles, so you don’t feel too overwhelmed by trying to save too much at once.
Save one-time windfalls
Put your tax refunds, inheritances or money gifts right into your savings account upon receiving them, although it is tempting to spend it on a little treat for yourself. This way, you will remember to account for the things that mean the most to you, especially in the long-term, because one-time treats are rarely as important, says Carl.
Money books to start reading today!
