Saving money can be a very daunting task, especially for someone who is just starting out. It may be difficult at first, but after one gets the hang of it, it makes everything easier and more efficient. These tips may help people get the hang of it faster and give a boost of confidence for those who want to be more responsible with money.
The first and most important tip is to set up a saving plan and refrain from dipping into it. Having a savings plan allows for opportunities to do more in the future. Having a savings account does not mean an individual has to pour every single penny earned into it. The best way to start saving is to put a small amount of money earned from each paycheck or allowance into an account separate from the rest of the money earned.
A good starting point for many who want to start saving would be 10% of income or less. The 10% or less provides an opportunity to put the rest of the money towards where it is needed. One thing that is vital to understand is that saving money is not a prevention from doing the things that a person wants to do, it is just a way of working towards doing other things in the future.
The most difficult part of saving is not dipping into it. The desire to dip into the savings especially happens when the spending money runs out. A good way to prevent dipping in is being reminded that the only acceptable reason for taking out the money is to pay for what you have been working towards or in case of an emergency, like buying a new phone in replacement of one that broke. Make sure that the thing that is being paid for with savings is actually what is best – think larger purchases through. This tip is the start of the journey of saving money and is crucial for future success.
Secondly, make a system for organization and have fun with it. Organizing with cash or online is a great way to be positively introduced to the “art” of saving money. Organizing can be done with spreadsheets or online websites for those who would rather keep their money online. Spreadsheets can be separated into parts based on when a person gets paid or how much is spent on a weekly basis. Some people may have more responsibilities than others, so they have to be more particular in how much they can spend and what they put money into. Responsibilities may include, but are not limited to: car payments, phone bills, and in the future, rent and childcare.
A recommended site to start on is Mint Money. According to the site, users can “Effortlessly track [their] cash flow and gain insights that’ll help [them] see easy opportunities to save,” (https://mint.intuit.com/). Websites like Mint keep track of spending and give support for money tracking.
Organizing with cash can be a bit more challenging, but can also be enjoyable depending on the person. People can use folders and packages to separate and keep track of money. These folders can be fun if they are decorated and designed to one’s liking. Organizing does not have to be a burden; it can be enjoyable and express creativity if one finds an efficient – but exciting – way to do it. Organizing may not be the best for everyone but it is a good place to start, especially with money. One has to understand where they spend their money before they can figure out how and where to save.
The third tip is a recommendation that is often used, especially by people just starting out: find instructional videos on effective ways to save. Guidance from experienced individuals is incredibly useful for people just learning how to do something. One suggested YouTube account is “Financial Education.” This YouTube account is just as it sounds, financial education, put in terms that people with no experience saving can understand. This Youtuber gives information on stocks and investing, more efficient ways for saving and spending, and even starting a business. Other alternative accounts have even more specific tips that guide those into a consistent routine with money. These tips given, though, are not required; they are only suggestions that people can tweak to their liking, since everyone has a different process that will work for them.
The final tip is more directed toward the future. This tip is to start investing at a younger point in life rather than later. Investing is a process where money is put into supporting a company or organization, and over time, as that company earns more money, the investors earn more money as well. This process is not the same as saving, as investing is putting money to use on a regular basis, but they both have a good chance of generating a positive income over time if the business is successful. Though, this process is not always advantageous. If the business fails, there is a large possibility of the loss of money, rather than a gain.
Though it may start out as a daunting task, saving becomes easier and more manageable over time, and gives people the opportunity to do other activities they were not able to do previously due to a lack of funds. Saving is an important part of financial health and is crucial for teens wishing to become fully independent.