We all know it’s a good thing to be able to save money, but it isn’t always that easy to do and many people have never developed the savings habit. This is usually because their parents didn’t save regularly so they never learnt the benefits of saving. It is also partly because until the last decade or so credit was easy to obtain so it was tempting not to bother saving but just to get a loan or use a credit card. Even those with bad credit could get provident loans or guarantor loans where their parents guaranteed the loan repayments. So it was easy to build up a significant amount of debt but less easy to pay it off. However, by getting into the saving habit you can first pay of existing personal debt and then start saving for a rainy day fund that will help you avoid building up more debt in the future.
Why Save Money?
You might ask yourself why bother saving any money, if you can buy what you want now and enjoy life now? Well, you already know that approach is never going to be the best approach in the long term because it can lead to stressful situations where you dent can become overwhelming and you could risk losing your home or other assets. So here are the reasons why you should always try to save money:
- If the fridge breaks, your car needs repairing or if you can’t work due to serious illness.
- Saving for holidays or a new laptop or designer shoes might take time but then you can really enjoy these treats knowing you won’t have to still be paying for them long after the enjoyment has worn off.
- Paying for major items that can secure your financial future such as buying or improving a home.
Saving On a Low Income
It is always possible to save something, no matter how low your income, so it’s important to remember that. There are so many different ways to save – even just cutting back on basic things and putting the spare cash in a jar. Other ways to save money are:
- Avoiding buying non-essential items like new clothes and shoes or the latest electronic gadgets.
- Reduce your bills by turning the heating down a notch, remembering to switch off lights and negotiating better deals with energy suppliers.
- Avoid takeaways and ready prepared meals
None of the above good habits will make a difference if you don’t get into the habit of saving regularly – it’s the habit that is all-important. The best way to get into the habit of saving is to be aware of all the money you earn and what it is spent on. So create a detailed budget and make long term financial goals like saving for a house down payment or saving enough to improve your home or buy a new car, or take a holiday of a lifetime. Doing this will then help you figure out how much you need to save every month to get to that end goal.