It’s been a turbulent year for bank balances and savings. The Covid-19 pandemic has cut through cash like a hot knife through butter, and it has made the economic future for many uncertain. Saving can be hard at the best of times, but trying to finance a new house or a retirement fund has perhaps never been more challenging.
It’s time to put the past behind us, though. As the year finally draws to a close, it is time to dust ourselves down and look forward to the next 12 months. It is time to look at our financial situation and figure out the best way to improve it, so we can build a cash mountain to deal with anything life has to throw at us.
So if you are trying to learn how to spend money more wisely or find out the best way to help your money tree grow, the following tips are for you.
1. Monitor Your Money
This one may sound obvious, but you would be surprised how many people neglect their bank accounts.
Understanding your income and where you spend it is vital to know the next step in your savings journey. This may involve sifting through your latest financial records (which can be a drag), but it will be worth it in the end.
Having a clear picture of your finances will then help you budget and cut out any unnecessary spending. You will be able to see your monthly income, your monthly outgoings, and how much you can save without missing out on essentials.
A savings journey is long and is certainly not an overnight fix. Monitoring your money is the first step in this mission, and perhaps the most vital.
2. Set Goals
So you’ve worked out how much money you’ve got and how much you spend each month, but what next?
Setting your financial goals is incredibly important as it shows you where you are heading. Whether you want to buy a property for the future, put money away for rent, or even buy a bicycle, knowing precisely what you are working towards will help you keep focused.
The future is often uncertain, but amid a global pandemic, this is even more so true. Remaining focused on your short term or long term mission will help you keep your money safe.
Remember, though, bills and food takes precedent over any long-term goals, and it’s not the end of the world if you dip into the savings, which is why the next tip is so important.
3. Make a Rainy Day Fund
Besides your long-term strategies, it is crucial to have a pile of money available for any rainy days the world may throw at you.
Most experts suggest saving up anywhere between three to six months worth of salary to combat any disaster that could befall you. That can obviously be a big task to do, but don’t worry – slow and steady wins the race.
You already know how much you spend and how much you can afford to save, so put that money into a savings account each month, and before you know it, you will have racked up the cash in no time.
This takes precedent before any long-term budgeting. After you have your rainy-day fund out the way, you can comfortably focus on the future, knowing your present is in safe hands.
4. Live by the 30-Day Rule
Embarking on a quest for saving can mean you miss out on all the fun stuff you usually buy, but it doesn’t have to be this way. You can still buy some luxury items on a budget, but you need to follow the 30-day rule.
The rule is simple; if you see anything you like, don’t buy it yet. That may sound like it goes against what was just said, but there’s a catch. When you spot the item, write down the price and where you found it and wait 30 days.
This 30-day wait will help clear your mind and help you decide if you really want it or not. The rule will stop any impulse buys, and in turn, will save you a tonne of cash.
If the waiting period ends and you still want the item, you can buy it knowing it wasn’t a spur of the moment decision.
5. Invest, Invest, Invest
When people think of saving, they often consider savings account or piggy banks, but one excellent way to save is to invest.
Spending money to save? That sounds quite contradictory, right? But investing is a perfect way to secure your money and earn a passive income along the way. It is just like putting your money into a savings account, yet you will be making an income on top of that.
It’s a surefire way to grow your money tree taller than ever, but where to start?
From investment apps, stocks and shares, to property, there are tonnes upon tonnes of options to choose from. Researching these options is vital, but you will find property offers the best investments.
It can be a bit pricey to get on the property ladder, compared to stocks and shares, for instance, but you will be a lot more secure for the future. Stock prices can fluctuate frequently, but property is often far more stable and reliable. You can earn rental income and sell your property years down the line for a considerable profit.
Sorting your financial situation out first is essential, though, but after that, investing is the next best thing to do.
If property investment sounds good to you, check out RWinvest to learn more.