how to save money, the steps to take to get started and the how to cut down on expenses.
Practical Tips on How To Save Money
Track Your SpendingFirst thing you need to do before you can start saving is monitor your current spending. Have a record of how you spend money and what you spend it on. Saving money requires you to be accountable to yourself on how you take out cash. Keep a notebook of your daily and weekly spending.
Choose A Saving GoalNext, create a saving goal. How much do you want to save in what period of time? A good suggestion is to pin your saving goals to particular tasks or expectations that your savings will help you meet. For example, you can save to start a business, or take a professional class, or to make an investment. Have a total of how much you want to save, and then plan smaller, achievable and measurable goals to help you get there. For example, if you intend to save N200,000 in five months you should be saving N40,000 every month or N10,000 weekly.
Stick To A BudgetTo help you manage your expenditure, you need to plan out a budget. A budget is a personal statement of your estimate of income and expenditure for a period of time. Your budget should state how much will be saved and then allocate a percentage of your income to various items of expenditure, like feeding, transportation, etc. Be disciplined and stick to whatever allocations you have set for yourself in your budget.
Use An Automated ToolAutomating your saving is a smart way to make sure you are not tempted to spending more. There are lots of apps that can help you save your money by automatically deducting a preset percentage regularly, from your bank account. A few of them are: Piggy Bank, Cowry Wise, Kolo Pay.
Ways You Can Cut Down on ExpensesNow that you are ready to start saving, you can only achieve this by cutting down on expenses. Here are a few suggestions on how to spend less.
- Always make a budget when going shopping
- Restrict online shopping
- Order small servings at restaurants
- Be decisive about what entertainment you choose to indulge in, e.g. partying, eating out, movies,etc.
- Try DIY tricks and ideas to help you solve domestic problems without having to buy a new item or pay for a service.
- Change internet bundle plan
- Spend on phone calls
- Monitor your electric bill
- Make effort to explore cheaper but valuable spending options, like alternative clothing stores, cheaper transport means, etc.