We have all heard how important it is to save money for our future but most of us have no idea where to start. Most people will start setting a little money aside here and there and expect to see big returns. This is just not the way it happens. In order to save money for your future you must be diligent and constant in contributing toward your savings goal. By doing a few key things you can easily save money for your future. Here is how to do it.
-Start a Budget
The first thing you must do is start a monthly budget. If you do not have a budget you are more likely to spend more, save less and have your money telling you what to do instead of the other way around. All a budget is is a list of your income and expenses with a total at the bottom of the difference between the two. If your income is larger than your expenses, then you are doing well. If not, try to find ways to cut your expenses so that you are no longer in the red.
-Pay Yourself First
Also, in that budget you are going to want to put saving for your future as the first expense you pay. Pay your future self first. Decide how much you would like to contribute to your savings account every month, say 10%, and then make it your first priority to pay. If you find yourself coming up short on cash, cut out something else. If you stop paying yourself now, you will never have money in the future.
Whether it is large tax return or an unexpected bonus, put that money you were not counting on toward your future. You were not expecting that money anyway, so it will not really be missed. It can be so easy to blow that money on a TV or a night out on the town, but if you do this you will likely finding yourself wondering where all that money went. So take a deep breath, remind yourself of your goals, and give that money to your future you.
If you are making ends meet and have extra wiggle room for fun stuff, do not increase your lifestyle when you get a raise. Instead, put that extra money you receive every month toward the savings part of your budget. If your financial situation is good, there is no reason to put that money anywhere other than the future. However, if you just can’t bear not enjoying some of that raise now, put just half of it in savings and enjoy the rest now. You will not be saving as much but at least you will still be saving.
Saving for the future is such an important part of financial security. Though it takes some discipline, in the long run it is worth it. Think of all the things you will be able to do down the road when it gets hard to save. You now know how to save money for the future, so start doing it.