The Concept Of Saving
Welcome back to my blog, today we are talking about the concept of saving. Most of the time saving money is not usually sustainable because we tend not to understand the concept behind it. Like I said this blog is all about Financial Wellness. To get a better understanding what financial wellness is please read about it here.
Today I would like to take you through a process that has worked for me. I hope it will help you kick start your saving journey.
What Is Saving?
In the most simplest explanation saving is basically the portion or a percentage of income not used for daily needs. Saving can be done in two different forms.
- You can save money by putting a certain amount of money on a separate account for a specific goal.
- You can save money by cutting down on certain expense.
Today we will focus on the first type of saving i.e. putting a certain amount of money for a specific goal.
What Are You Saving For?
The most important thing when you are saving money is to set a goal for what you are saving for. In most case when we save we do it just to have money without attaching a goal to that money. This is usually a recipe for failure because you are most likely to use this money anytime. For every money that you save you need to attach a goal to it so it can be easy for you to focus.
Why Is It Important To Attach A Goal To Your Savings?
Attaching a goal to your savings helps you to build a momentum. The truth is most of the time it is not the money that we want but the things that the money affords us to buy or experience. When we look forward to a certain experience our focus muscle and determination is strengthened. When the focus muscle is at its maximum capacity nothing is impossible.
How To Attach A Goal To Your Savings?
We are all different individuals with different goals. When we understand this it makes it easy for us to focus on what speaks more sense to us. For example in my family we do a family trip and we always plan for it. This means we must find out how much the trip will cost us and then decide on how much we will save on monthly basis. So for this goal we know exactly how much we need to save. We are saving for fun and we are always looking forward to the experience.
We also save for serious things, like saving for house renovations, car services and emergencies. I wrote a full blog post about emergency funds and you can read all about it here. The most important thing is to set a goal and put your focus muscle to it and allow it to happen.
So sit down with your pen and paper, write down your goals. Identify the amount of money you need for each goal and decide on how much you are going to contribute on monthly basis.
What happens If You Are Not Setting A Goal For Your Savings?
When I started to being intentional about saving I used to set up a plan, start saving and then at as time goes by I would use the money. Every time I would experience a bit of a financial discomfort, my savings account would be my go to place. I would empty it and start afresh. So basically I was just putting money aside to use it for whatever and end up not having any savings. The sad thing is I would still have goals that are not ticked off from my list.
When you do not know what you are saving for, you are most likely to:
- Use that money and not know what you have done with it.
- Lose momentum and stop saving because of financial challenges that show up on a day to day basis.
- Allow any thing to be an emergency and end up accessing those funds even on the events that can wait.
How To Start Saving?
The issue of starting can always be challenging especially when there is no money to save. What I have learnt as a financial coach is that nothing happens unless you start. So here are few steps to start.
- Set a goal by writing it down.
- Find out how much it will cost you to achieve this goal.
- Decide when you want to achieve this goal.
- Divide the costs by the number of months it will take for you to reach the full amount.
- Open an interest bearing account
- Start saving!!
Thank you for taking time to read the post. I hope it will help you kick start your saving journey and if you would like me to help you, you can contact me at 074 931 1000 and book a coaching session. Remember if you are interested in getting my book Healing The Wounds Of Debts, you can click here to place your order.