In 2014, my spouse and I managed to pool together $50,000 for a property deposit. This achievement was significant for us, especially since we had invested the initial years of our wedded life eradicating a $45,000 debt.
Today, approximately 20% of our salary is spent on savings and we take great pleasure in observing our financial growth. For us, having savings adds to our peace of mind, it provides assurance during a financial catastrophe, and enables us to comfortably allot funds for home improvements, holiday planning, and various investments.
To match our saving zeal, here are some strategies you can employ:
1. CLEAR DEBT
Without question, the best strategy to make substantial savings is to punctually disburse your debt. When we tied the knot, we owed $45,000 and survived on my partner’s minimum wage and my average American income. Thus, we decided to overhaul our financial habits and consequently moved from a single-bedroom apartment to a guesthouse, saving an extra $500 per month. Hardships such as postponing our honeymoon for an extended time, restricting our restaurant visits, and adhering to a strict budget were other decisions that led us to dissolve our debt.
2. LIVE FRUGALLY
After clearing our debt, we could have splurged on luxuries with our newfound financial freedom, but instead, we decided to regularly save. We opt for a modest lifestyle ─ we drive decade-old cars, we ensure to have cash for our vacations and never exceed our bank balance.
3. ESTABLISH A SAVINGS TARGET
Rather than mindlessly accruing savings, we establish precise targets and save to accomplish those objectives. This gives our savings a purpose and restrains us from using the money impulsively. Nowadays, we’re gearing up to fulfil goals like an emergency fund, Christmas gifts, a newer vehicle, home improvements, and our annual holiday.
4. PRIORITIZE SAVINGS
If you’re earnest about saving, the principle of ‘pay yourself first’ becomes a priority. Before managing any of our expenses, I ensure to set aside some for savings first. The savings are directly deposited into a separate account to avoid any temptation of spending. This ensures that we allocate a specific amount to our savings agenda every month, which prevents any disappointment at the end of the month when there isn’t enough left to save.
If you’re equally committed to making savings, we’d love to hear about your methods. Share your insights on how you’re increasing your bank balance. Visit SmartAsset.com for more financial advice!
