A lot of people are living from paycheck to another and breaking this cycle is not that easy. Worry not because you are definitely not alone. Whether it is because of your high rent or your underpaying job, you still need to stop that cycle and start saving, according to a financial adviser named Jacqui Park.
Of course, before you start giving up your credit cards, or downsizing your home for a cheaper rent, and start getting a side hustle, you can start saving for your future and for unexpected expenses, like emergencies and such.
So to get all us inspired to start saving, we asked some help from Jacqui to give us tips on how we can start saving successfully and effectively. Continue reading the information below so you can start learning from the pro.
How To Prepare A Savings Plan
Before you start saving, you need to make sure that you’re serious about it. This is just not about your money but about your behavior as well. Even if you download the best apps that you can find, it will be useless if you don’t put action and your heart to it. So here are ways on how you can start a savings plan.
The first thing that you need to do is to know how your finances are right now. You need to check your assets and if you are in debt, how much you owe.
Look at the flows, like how much income comes after tax and how much you’re spending on things, and especially on things that you don’t actually need. To get a hold of the patterns, you need to check the last three to four months of your expenses. This will help you get an idea on how much money is actually going out.
Start specifying your goals, especially if you are planning to get a big purchase or if you plan on going on a holiday break. You need to check how much you need and the date where you need them. When specifying your goals, you always need to include your retirement. You surely need some retirement funds when the time comes, so always keep this in mind.
Now, once you have done the three things above, you need to make sure that you put aside some money every week. This will help you hit your goals in no time, while also living the life. If you stick to these things, your life and your finances will surely fall into the right places.
Biggest Mistake People Do When Trying To Save Money
One of the biggest mistakes when it comes to saving is that they sometimes treat it as if they are dieting. So they sometimes do it and they sometimes don’t. Sometimes, there are also people who try to save a huge amount of money and end up stopping because they eventually spend the money that they are trying to save. This is especially when they see how much they are already saving.
The best thing to do is to start small, and that’s by saying No to that expensive cup of coffee near your office. If you’ve been buying coffee almost every day, you can start by doing it once a week, then next week, start doing it twice a week and so on.
Another mistake that people do is that they try to save, while also having a personal loan debt and a credit card debt. It is always better to save when you’re debt free. The best thing that you should do is to start paying them off because you will end up paying more interest if you let that debt climb up.
Ideal Number Of Accounts
According to Jacqui Park, it would be best to have three bank accounts. You need to have one where you can start saving, another where you can pay for bills and a third one for fun. All three accounts can be from one bank, but it would be best to have three different banks. You need to make sure that your savings account should have a high-interest especially if you save more money into that account.
These are the effective ways on how you can save money effectively. Listening to a financial adviser is always a good thing because they know best when it comes to your finances. You can either hire one or talk to one, if you can’t afford to hire one at the moment. Having a financial adviser will definitely help you when it comes to your finances and get you ready for your retirement.
Based on Materials from My Domaine
Photo Sources: Investing Money, Pixabay, Pexels