Money is something that we can’t live without (unfortunately), and it can be tough to figure out simple ways to save money and how to use your savings to pursue your financial goals. The thing is, sometimes the hardest part about saving money is getting started.
Teaching our kids the importance of saving money from a young age is a goal that we all hope to achieve – starting them out when they’re young might build good habits for them as they grow up and join the workforce. One of the best ways to teach them is to actively practice good habits, as you’ll be leading by example.
So here are some ways in which you can start building better money habits, for both you and your kids:
One of the most basic, and first, things that you should do is to figure out just how much you’re spending for a month. Keep track of every single item that you buy or spend on (meals, groceries, petrol, loans, utility bills, etc.), and once you’ve got the data, start organising them into categories, and then tally them up.
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If you start off by tracking your expenses each day, you’ll be able to get a better idea of where your money is going. Once you have tracked your spending for thirty days, multiply that by 12 and that’s roughly the amount of money that you spend in one year. This is just an estimate because there are months where you’ll spend more money and less money, but this gives you an idea.
There’s a bunch of apps out there that’re made to help you track your expenditure, or you can simply do it with a notebook app! Once you’ve got your expenses recorded, you can proceed to…
Once you have an idea of what you spend in a month, you can begin to organize your recorded expenses into a workable budget. Why is a budget important? It ensure that you’ll always have enough money for the things that you need, and the things that are important to you.
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Following a budget will also keep you out of debt or help you work your way out of debt, if you’re currently in debt. Your budget should outline how your expenses measure up to your net income — so you can plan your spending and limit overspending. Net income is your take-home pay after deducting your CPF contributions.
In addition to your monthly expenses, be sure to factor in expenses that occur regularly but not every month, such as car maintenance, doctor and dental fees, birthday spending, date nights, and other miscellaneous items.
Once you’ve got your estimated monthly expenditure and budget finalised, up next is…
Working within the budget that you’ve come up with, create a savings category in it. A good estimate would be to put aside 10 to 15 percent of your net income as savings. However, if your expenses are too high to even save 10 percent of your net income, it might be time to examine your expenses more closely – identify the less important things that you’ve spent on, and try to cut down on them in the future.
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It might be difficult to cut down on expenses such as entertainment and eating out because we’re all about instant gratification, but that’s why we have the upcoming tip – setting goals – to help us delay that gratification!
One of the best ways to save money is to set a goal for yourself, or for your family. What do you want? A car, some renovations done to your home, a down payment for a home itself, a longer holiday to a country you’ve never been before, a new gaming system or computer?
Write down what you want, and then figure out how long it might take to save up for it. Plan for both short and long-term goals:
Short-term (1 – 3 years)
Long-term (4+ years)
Whether it’s a short, mid or long-term goals, if you need money management advice, consider speaking to a JLOrganisation specialist. Drop a text to 96892044 to book an appointment with their specialist.
Credit cards are useful in many ways, but only if you’re disciplined enough and you’re able to keep your spending in check. That’s why a budget and a record of expenses is so important for credit card owners! Otherwise they could rack up a ton of interest and debts that will take quite a long time to pay off.
Some cards offer incentives to spend, like cashback, air miles, or loyalty points. This means that you can actually make money from using your credit card to buy items. However, these are only useful if you pay off your bills on time; if you get charged interest, it’ll definitely be worth more than the value of the rewards!
Make sure to do your research on whatever card that you want to sign up with, and always keep track of whatever spending you make and pay your bill on time!
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