Did you know that the gender gap extends to retirement savings? That’s right, according to this report, only 19 percent of women are confident about their retirement plan, as opposed to 35% of men.
Regardless of your gender, if you’re someone who’s worried about your savings or retirement plan, know that it’s never too late to start.
No matter what your financial situation is right now, with the right mindset and a few evidence-based approaches, you’ll soon be on your way to a steadier and more secure financial future. Saving money is going to be much simpler with this guide.
Let’s dive right into the various dos and don’ts of creating a consistent savings plan.
1. Do Be Aware of Your Monthly Budget and Expenses
Long-term financial success generally calls for financial awareness. One step you shouldn’t skip is taking the time to create a thoughtful, well-evaluated monthly and yearly budget.
If you’re just starting out, here’s what you need to do:
- Consider your expenses and create categories based on the type of expense
- Observe and note down your daily expenses for a couple of weeks or longer
- Consider your current income and set aside money to be saved, spent, and invested
One way to practice more discipline with regard to monitoring your expenses is to set a nightly alert on your phone to add in your daily expenses. Additionally, you could also download a budget app on your phone to simplify the tracking process.
2. Do Focus on Cutting Costs Wherever Possible
Even if it is a little bit of a struggle to save right now, your future self will definitely thank you for that bit of sacrifice. Find a way to save even if it’s hard. Look over your budget and study it till you find an unnecessary expense.
Even if your savings come from something as small as skipping an expensive Saturday coffee, consider it worth it. Wondering what else you can do to cut down on costs?
If a purchase can wait, put it off until the product is on sale. Download an app like Honey to make the most of online coupons. Buy regular-use products in bulk.
You can also explore pages and forums like r/frugal on Reddit, or follow blogs like these for savings tips and hacks.
3. Do Follow a Goal-Oriented Savings Plan
Why are you saving? Really think about your goals that involve any kind of monetary investment and set aside savings for each of these categories.
Do you want to travel? Do you want to study abroad? Do you plan on buying a house or a car?
Consider how much of your income can be set aside for savings and how important each of these goals is to you. Accordingly, you can allot a certain percentage of funds toward each goal.
Do remember to always ensure that you have an emergency fund. The good thing about saving is that even when you’re thrown an unpleasant curveball your emergency fund will be there to help you get through it.
4. Don’t Put All Your Savings in One Space
Diversify your savings. Don’t put all of your money into a single bank account. Rather, take the time to explore and maintain different accounts to hold your money.
Additionally, you can also consider investment plans that offer long-term returns. If you’re unsure of where to start or how to go about this don’t be afraid to ask for help. Financial freedom is a journey, and a little help from a financial expert can go a long way.
5. Don’t Forget to Regularly Revise Your Financial Plans and Progress
Goals change, income changes, and so should your budget and savings plan. Be sure to regularly evaluate your budget to see where you can save and what’s worth investing in.
Do you still want to prioritize a particular goal? Or do you feel like something else requires your attention? Perhaps, you have a new goal in mind.
Be sure to update and analyze your plans every few months.
6. Don’t Ignore Credit Card Debt
Stay on top of your bills, especially credit card debt. Your budget should always include an amount set aside to pay your debts. Remember that these debts only grow the longer you take to pay them.
At the very least try to cover the monthly minimum. Additionally, if you have a decent track record of paying your debt, you could even call up your bank and ask for an interest reduction. Another way to get a better rate of interest is to combine multiple credit card debts into a single one.
7. Don’t Compare Your Financial Progress to Others
As a general rule of thumb, it’s best never to compare your progress to someone else’s. It can be easy to fall down the social media rabbit hole and wonder why you don’t have what your friends have.
If this is a struggle for you, do consider limiting your time on these platforms. Your financial journey is unique and your own. Take things one step at a time and consider how far you’ve come.
Not only will this help you stay focused on your own financial goals, but you’ll also be more at peace.
Saving Money the Smart Way
Saving money and taking the path to financial freedom can seem daunting at first when you don’t know where to start. However, by creating and sticking to your budget, understanding your spending habits, cutting down on costs, and following a goal-oriented savings plan, you’ll be well on your way to that future you dream of.
Need a little bit of help? Don’t worry. Our team is as dedicated to your financial success as you are. Schedule a FREE 45-minute financial strategy consultation with our qualified experts for a personalized evaluation.