In Part one, I listed the following as tips to help you inculcate the saving culture
· Recording your expenses
· Making a budget
· Planning on saving
· Choosing what to save for
In setting targets to save for, you may discover you want to save for more than one thing. Make sure you save for the most important things first. Example, house rent is definitely more important than a new car. You'll need a roof over your head before you can think of a car (except if you'll live in your car; lol)
Failure to do prioritize can get you frustrated due to a lack of sense of fulfillment. Don't fall into the trap of not prioritizing.
PICK THE RIGHT WAYS TO SAVE
· savings account
· Stocks, bonds and shares
· Fix deposit accounts
· High yielding accounts are good platforms to save your money in.
Stocks, bonds and shares are a bit riskier as saving platforms but most times a good investment banker will make sure the value of your money stays current and you stand a chance of making it grow than when it's sitting in a bank account.
Ask your banker about the fixed deposit option, some banks pay you interest on them for the duration it's fixed, some pay you some deposit fees even on top of the interest. Also ask of the high yield accounts that you may exploit, some come with peculiar perks that encourage saving.
Please don't keep your savings where it's easily accessible when the need arises. That said, easy access should be only if your target/ reason for saving is for emergencies.
MAKE YOUR SAVING AUTOMATIC
This works best for regular salary earners BUT people who are not regular income earners can also practice this.
For regular salary earners- instruct your bank to take off the savings off the top of your salary and put in a separate account you created out off the platforms you chose in step 6. You won't have access to your full salary, only to less the saving amount.
For non- regular earners- allow your banker/account officer to remove a stipulated percentage of each deposit and put it in the platform in step 6, like that you can save.
WATCH IT GROW
Regularly check on your saving and mentally congratulate yourself on the progress so far. Regular checking has it's benefits as it constantly refocuses you on saving and on your reason for saving.
Hopefully with following tips, you’ll gradually inculcate the saving habit. Note that it won’t be easy as our needs always surpasses our income but by saving, you’ll always be ready for life’s emergencies.
In addition to saving you can earn passive income through several means, we'll discuss these means in my subsequent post.
Meanwhile, best of luck as you learn to save