Saving money for the future should be a simple procedure but most people find this very difficult to do.
Most people need to save money in order to build for their financial future but how many of us keep putting it off? "I'll start next week or I'll start at the beginning of the month when I get paid. The more you postpone this important decision the more future income you are losing. Long term this will mean you will not be able to achieve a financially secure future.
Saving money requires discipline and in order to save money you must first of all have control over your finances. Some people thing that the more money you make the more you will be able to save. However if you have a lot of credit card debt and have a lot of month left at the end of the money you are not controlling your money and consequently you are not saving for your future.
The answer is not rocket science. You will have to cut down on your spending and put the extra money into savings.
This is not something you can do just off the cuff. You must sit down and write down your financial goals. Categorise your goals into long term medium term and short term. A long term goal may be retirement, a medium term goal may be a deposit for your first home and a short term goal may be a new or second hand car.
You must then put a monetary figure on these goals followed by a time frame. Perhaps you want a new car in one year and a home deposit in three years. Doing this will make it easier for you to put your money aside.
You will need to open up a savings account. Using your current account will simply not work as you will always find reasons to spend the money. Set up a standing order or direct debit so that a fixed amount of money is taken automatically from your current account and transferred to your savings account each month. Once you do this saving will become a lot easier.
As time goes by you will see your money beginning to grow and the rewards that will go with it.
In order to be able to save you will need to plan a written budget for the next year or six months. Take each category of spending from the highest to the lowest. For example from your mortgage to what you spend on newspapers and put a monetary value on each for the next year. Then as each month goes by match your actual spending with your budget. Doing this simple exercise will enable you to control your spending.
If your credit card debt is high you must put your saving into paying off the debt. Most credit cards have interest rates between 18 and 20% whereas the saving interest rate will be between 3 and 5%. Therefore it makes a lot of sense to eliminate your credit card debt first. However you may need to set some money aside for emergencies.
Another way to boost your savings even more is to put unexpected money such as overtime, pay rises and bonuses into your savings. This means your budgeted spending versus your actual spending as mentioned above will stay the same.
Therefore it is not too difficult to start saving for your future. Once you start putting pen to paper you have already done the hardest bit.Once you then begin to see the fruits of your success it will much easier and even enjoyable.
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