Hi there. At some point in time in our lives, most of us land ourselves into jobs which are our first steps to independence. Lives are very different when you have just started earning. There are fewer responsibilities and a new sense of financial independence. This is How to save money for future without sacrificing on the fun: Advice.
Unfortunately, I have personally witnessed a lot of people who have started earning but do not know how to save money. A lot of young people believe that either you can save money or you can have fun, but that is not true! Both these things can be done simultaneously if you manage your funds correctly. There might be other ways to save.
Why save money?
Earning money is important, as we all know, but so is saving money. As a matter of primary importance, setting aside cash is significant on the grounds that it secures you in case of a money related crisis. Furthermore, setting aside cash can assist you with paying for huge bills, ensure a financially secure retirement, keep you away from obligation, diminish your money related pressure, leave a monetary heritage, and furnish you with a more sense of financial security and boost confidence.
How to save money for future?
Here, I have listed down some Advice from the wise which may help you to save money for the future.
1. Track your flow of money, allocate a budget
Tracking your spendings is very essential if you are trying to save up. It will give you an idea of how much you spend on essential and non-essential items. More importantly, it will also help you keep track of those unnoticed transactions made every day on food, transportation, etc.
Instead of relying solely on memory, it will be much helpful if you note it down instead. Allocate a budget for where your money should go. Plan where you choose to spend and how much you choose to spend. Also, keep a record of where you spent you spent your money each day. This will help you realize if or when you happen to overspend.
You can do this by any method you are comfortable with, you can either write it down using pen and paper, make a spreadsheet, or even download a money-management app on your phone, like Monefy, Walnut, Mint, Wally, etc.
2. Avoid Borrowing unless it’s the last resort
There will be a lot of things that will lure you into blowing away your savings in one go. Apart from day-to-day purchases, you will come across bigger expenses like buying a gadget or going on a vacation, etc. Since the newly earning usually do not have a partner or kids to look after, they tend to be unafraid of borrowing money from the banks.
This puts them under debt and they’re much likely to borrow again. This happens because borrowing money gives them a false sense of affordability. Hence, young people are very much likely to fall into debt and this prevents them from saving money. So, the best idea is to think before you start swiping that plastic.
3. Pay off that debt first
When you start earning and wish to save money for the future, it is better to pay off any kind of debt that you are under, e.g. Education debt. It is always advisable to pay off the debt you are already under as soon as possible.
Do not borrow any more money unless it is the last resort. Paying off debt will help you live freely and make your life less stressful.
4. Do not spend on Unnecessary Items even if they are affordable
Sometimes, we happen to find out some luxurious items that are expensive yet affordable. The idea of claiming ownership of those items in front of other people seems very lucrative. This gives us an urge to spend that cash on items that may be unnecessary.
I know you want to get that latest smartphone with those latest features, or that latest smartwatch that will look really good on your wrists, or those expensive shoes that will make you ‘stand out’. With nobody there to stop you, and those things being affordable, it is hard to stop your hand from swiping that card. Ask yourself if you really need to buy it instead of spending money on something useless.
5. Have an ‘Emergency Fund’
So basically, we save also because we cannot foresee the future and should have a money cushion in case of urgent need. At the beginning of your career, most young people will tend to change jobs from time to time. This calls for a contingency fund for you to help you through the phase of temporary unemployment that you might happen to witness as you switch jobs.
Apart from this, you need to save money and have an emergency fund for smaller inconveniences as well, like, your vehicle breaking down, a sudden trip to the folks, small medical problems, etc. This will provide you a sense of security.
Reduce Reuse Recycle
Just like the environment, these 3 R’s can save money as well.
REDUCE- the amount of unnecessary consumption. The less you spend on the items not required, the more you save for actual needs.
REUSE- old goods that you once purchased instead of buying new every time.
RECYCLE- unused clothes, gadgets, etc. Get creative, find new ways to utilize things.
Set some cash aside just to Blow it away!
Yes, as I told you at the beginning of this article, you do not have to sacrifice on the fun to save money. Put aside some percentage of your money as ‘Blow it away’ fund every month. Use this money to have fun. For example, you can save up 10% of your earning to pamper yourself.
Instead of fixing a certain amount to put aside, fix a percentage of money so you have the motivation to work harder, and increase your earnings. Pampering yourself is as important as being disciplined. However, you will need to be disciplined and keep your urge to spend more very much in control.
The money you earn in your early years should make you more responsible than reckless. You can be flexible sometimes, but make up for it later on. If you happen to fall prey to destructive habits then it is always better if you try to give up on it, for example, smoking, drinking, drug abuse, etc. These habits cost you not only in terms of health but also in terms of finance.
You can also follow some of the tips listed below if you want to cut down on your expenses-
Tips to save money
- Switch off lights, fans and other electrical appliances when not in use to cut down on electricity bills.
- Eat home-made food more often.
- Use coupons to get discounts.
- Compare prices at different stores and websites before you buy something expensive, especially gadgets.
- Buy local items instead of going for brands.
Also, learn about how taxes work in your country and if there are taxes on the kind of saving options you opt for. Educate yourself on the topic and be aware of fraudulent practices. Never give out your bank details to anyone without verification.
