Financial education is an important aspect of anyone's life. We all need money to do many different things. We need money to foot our bills and enjoy the finest things in life. Like famous Hip Hop rapper J. Cole, one said, "Count it up! Count it! Can't take it when you die, but you can't live without it."
But wealth barely falls on anyone's laps. We've all got to take deliberate action to build it, either from scratch or by leveraging on inheritances. You may not have control over the economy, but you do have control over something; the moves you make.
One way to build wealth and stay rich is by cultivating the habit of saving money. But the truth is, as simple as it seems, saving money is not the easiest thing to do. Many people hop on a savings challenge now and then. However, as we've seen repeatedly, a majority of the people who start enthusiastically don't complete the journey. The reason is simple: they don't know how to save money.
This article shows you simple tips to cultivating a savings culture:
1) Watch Your Spending
The first step to cultivating a savings culture is keeping track of your spending. When you're not saving money at all or as you ought to, it means you're spending too much.
It becomes easier to control how much you're spending when you know where your money is going. A simple way to track your spending is to make a list of your basic needs and another list of your wants. Record how much money is being spent on your basic needs and wants and compare this to the amount of money you make.
Ask yourself these questions: Are there some things you're spending too much money on? Are there things you can do without? Yes, that $2,500 watch is good but do you need it right now? Are there no cheaper alternatives that are durable and serve the same basic functions? Do you spend excessively during Christmas and other holidays?
2) Avoid Buying Things on Credit
We've all been there before; a need or want stares you right in the face, and you have no choice but to pay the bills using credit.
Buying things on credit will only incur more future spending as you’d have to pay back the money you owe. Therefore, you can avoid using credit for things you don’t need urgently.
3) Cut Down on Your Services and Utilities
Cable is good, but can you get cheaper cable or live without one? Are you consuming too much gas and electricity? You can turn off appliances when you aren't using them. Or you can use cost-cutting utilities, like fans, in place of an air conditioner.
4) Review Your Insurance Plans
Having an insurance plan in place is one of the most advisable things to do. Therefore, get a good one if you don't already have one. However, you've got to find out whether or not you're spending too much on an insurance policy. Perhaps, you're not getting good coverage despite spending so much. Make sure to check your insurance policy to see if you may need to cut down on it.
5) Develop a Savings Plan
Now that you know what and what not to spend your money on, it’s important to draw out a savings plan and strategize how you plan to achieve your goal.
For instance, you can start a save $1,000 in 30 days challenge and map out ways you want to do this. Do you prefer to set up an automatic transfer to your savings account after receiving your earnings? Or would you rather save manually?
Saving up money for the future is a wise thing to do. You can use the money later for more important things or invest it to make more money. Cultivate the habit of saving money regularly.