Saving habits to put into action for a better financial future
We all want to be successful at any and everything we do, right? Saving is no different. When we start saving, we do so because we have financial goals we wish to achieve. The key to becoming a pro at saving is to start building saving habits, which will become second nature over time and help improve your financial life.
If you’re ready to take control over your money and spending, read more below to learn the habits you need to start putting into action as soon as possible.
There are many things in life we can achieve by simply winging it but if you’re looking to turn your financial life around and become a pro saver, your best option is to have a spending plan for a defined period. That’s what budgeting is and it can help you track your spending, we explain more about the benefits of budgeting in this article. Additionally, you can increase your chances of success by using a digital budgeting spreadsheet or a budgeting app to guide you on your budgeting journey.
Live within your means
Living within your means refers to spending money only on things you can afford as detailed on your budget. If you start to move away from your budget, it means you’re deviating from your affordability and this is something that can land you in more debt than you can handle. So, stick to your budget consistently. Upholding this habit will help you long-term.
Automate debits and savings
Adopting a process that makes paying debit and saving easy and manageable is key to becoming a pro at saving. By setting up automatic transfers towards your debits and savings, you’re already cutting out a lot of stressful admin of trying to remember to channel money towards these things. It also stops you from thinking you have money and end up spending money you don’t have.
If you don’t know how to do this, your specific bank can help set this up or guide you as most South African banking apps have this capability.
Automate your debits and savings to go off on payday or two days after payday
Set up your debit orders and savings to go off on payday or two days after payday. This ensures that you send your money where it needs to go from the beginning. If you don’t do this you could fall for the trap of using this money for other things and only realise after you have used it. The last thing you want is a debit order going off when there isn’t money on your account, which will have you experience a negative transaction on your account. It also means you no longer have money to pay off your debit. Missing or paying off a debit late plays a huge role in your credit score.
Send your savings money into a fixed-savings account
Several banks have numerous savings options, such as flexible saving, pocket saving, fixed-short-term, and fixed-long-term saving plans. In most banks, the former savings plans allow you to save up and access your money at any given time. These are good to use for your wants. For example, when you’re saving towards a book, which you plan to buy in two months. But for serious savings, you have to ensure that your money goes into a fixed-savings account for a specified period of your choosing. It can be anything from 6-months to 36-months and these types of savings typically require you to inform the bank 30-days before the withdrawal.
Shop smart and live frugally
Planning your shopping will encourage you to avoid making impulsive purchases. Make a list of things you wish to buy, for example, if it’s groceries, write a list of every food item you’re planning to buy. Make comparisons on prices of your grocery items from different stores, of course, without compromising on quality and try to go for a cheaper alternative. You can use online stores to check for the items you need or want to buy. That’s how you can shop smart and live frugally. Remember that you have already factored your needs and wants on your budget, don’t deviate from it, when you make a shopping list ensure that it doesn’t go above your budget.
Have a plan for your spare change
We all have some spare change that remains from our shopping using cash. It can be anything from 10 rands, 5 rands, 2 rands, and 1 rands. Have a jar which you will use to dump this kind of money in. Let it sit untouched and you’ll be surprised at how much it will all add up to six months from when you started dropping the money there.
Track your spending and reassess your budget
Every two-months, set time aside to track what you’re spending on and how much you’re spending. If you find that you have paid off some debt, this is an opportunity to reassess your budget to see where you put the extra money towards. You can choose to put the money towards another debt repayment or savings or even start another savings plan which you didn’t previously have such as a retirement savings plan. You can take a portion and spend it on want as a way to reward yourself for your efforts.
The bottom line
Once you take these savings habits seriously and start adopting them, you’ll soon find out that saving, although challenging when you’re working on a tight budget, can be possible. When you see the progress you’ve made when you track your spending, you’ll be more motivated to keep going and you’ll reach your savings goals. In the end, you will also have more freedom to spend on your wants.