Grow with Us with Your Saving
Savings is process of setting aside a portion of current income for future use or for the fulfillment of future plan that need a relatively large amount of money. Our future plans and intentions may not be answered with the amount of spare money we take to our saving. Therefore, we do saving not only with our spare money, rather it might require to cut unnecessary expenses and use our income wisely to make saving meaningful.
The Importance of Saving Money
We save, basically, because we can’t predict the future. Saving money can help you become financially secure and provide a safety net in case of an emergency.
Here are a few reasons why we save:
- This could be any number of things: a new roof for your house, out-of-pocket medical expenses, or sudden loss of income. You will need money set aside for these emergencies to avoid going into debt to pay for your necessities.
- The costs for private and public education are rising every year and it’s getting tougher to meet these demands.
- If you intend to retire someday, you will probably need savings and/or investments to take the place of the income you’ll no longer get from your job.
To have freedom
- Ever thought about quitting your job without having another one lined up? How about wanting a bigger house or new car? Having a savings gives you the freedom you need to be able to make those kinds of choices.
In general, the more money you have, the more options you have. If you want to make a job change but aren’t sure where your next step is, that’s okay because you have your savings to tide you over for a little while. Want to upgrade your car? Go for it, you’ve already done the saving.
The point here is, when you save money you’re limiting your short term spending but actually maximizing your long term spending.
How much can you potentially save?
It’s important that you develop a budget using your net income as it reflects your take home pay after taxes and dedications. A common mistake people make is developing a budget off of their gross income. It’s a mistake because you’re budgeting money you never possessed. Remember your potential savings is the difference between your net income and your expenses.
When developing a saving plan ask your self these questions:
- Are there any variable expenses that you can reduce or eliminate?
- Is there anything you spend money on that you could eliminate and apply towards saving?
Some tips for saving money:
- Save windfall income – Any unexpected money like bonus, income tax return money.
- Try frugality – Purchase cheaper off brand items and save money.
- Break a habit – Try doing one less thing you expensive ventures a week and apply that money to your savings.
- Have a “buy nothing week”.
- Compare costs of major items before purchasing anything – Do your due diligence, shop around before making major purchases.