There are so many ways to save money and we hear about them every day:
- Stop buying coffee
- Eat out less
- Review your bills regularly and look for cheaper deals
- Review your mortgage or ask your bank for a lower rate
- Quite that gym membership that you never use
All valid ways to save, but what is the point of these savings?
Unless you have a clear goal/objective and a strategy to achieve said objective the saving in itself can be useless and soul destroying.
So you cut out coffee but did you actually see your bank balance go up, do you feel like you have more money? Or has that saving just been eaten up by some other expense.
So before you work out how you want to save- work out why you want to save!
- To buy a house
- To travel
- To have a baby
- To build a nest egg
- To take a sabbatical from work
All great reasons to save, as are many other reasons you might have in mind.
Now you need to work out how much you need for each goal.
This is the time to look at your budget and see what you can save or what you can cut to save more.
Here’s where the strategy comes into play; How much can you dedicate to each goal? When do you want to achieve the goal versus when you can realistically achieve the goal?
And, how will you save for that goal? The above timeline and type of goal will help you work out the best way to save: cash, shares or maybe an investment property….
Now those savings are taking you somewhere, so cutting them out doesn’t hurt so much.
In a matter of months you will see real progress towards your goals!
An easy concept to apply whether you are earning $50,000 a year or $150,000 – strategy is the key behind your savings plan!
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