Saving a Small Amount of Money Each Week Can Help in an Emergency
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We are all most likely taught from a young age to save some of the money we have. However, the realization of this concept is often hard for a few reasons. The first is because we usually want to save up a considerable amount, and we often devalue the importance of a small amount at a given time. The second reason is also that advertisements and people who push us to continue to spend more by buying useless things that surround us. However, saving a little money each week can be a great help in case of an emergency. Below are a few reasons why and tips to help you get started.
Start with a Small Amount
As mentioned earlier in this article, even a small amount is better than nothing. Maybe at first, you can start with saving the cost of a cup of coffee for one day. Then you can upgrade to the cost of a meal. By slowly moving up how much you are saving per week, you are realistic with you spending. You are also disciplining yourself so that you are building yourself up to larger amounts.
Your ideal goal for savings is 10% of your pay each month. The best thing to do is to take this out at the very beginning of each time you get paid. That way you are not tempted to spend it over the course of the month. If you currently cannot afford to do that, start out with 5% and work your way up each month. If you are already at 10%, think about ways you can slowly build it up until 20%. It is amazing how fast you can start saving when you make a conscious effort.
If you are currently in any debt, first work on paying that off. It is useless to be saving money if you will only need to pay that back. Try and balance both, perhaps 5% a month to go to returning money and another 5% to your savings. Once you are debt-free, keep the money you initially would have saved to pay it backand put it into your savings.
Take a look at your budget and understand what you are spending most your money. If it is food, look at ways to cut down. Try not to go out to eat and instead cook at home. Perhaps pick something that you will not buy or eat for that month. Or see if you can acquire coupons for some grocery stores. If it is clothes and other things, see if you can go to a local secondhand store and pick things there instead. Or minimize your shopping trips to once a month.
There are many small ways where you can start saving. The largest problem is often with ourselves. It is hard to self-discipline ourselves to a place where we are living the way we should. An excellent way to bring in accountability is to ask a friend to help you. Perhaps you can work on one thing a month together. It is best if they are also trying to cut down on their spending. However, even if they are not, you can ask them to check up on you once a month to make sure that you are indeed on track.
Never take out of your Savings (unless it is an emergency)
Often, people start out with lofty goals, like saving 30% of their pay every month. However, this quickly fades by the end of the month when they are in desperate need of money. A better alternative is to realistically budget your monthly savings, and see how much you can save without going into your living costs. Even if you are only saving a little at a time, but if you do this for a long period, the money will begin to add up.
You cannot touch the money unless it is a real state of emergency. Once you allow yourself to spend that money once, you will have broken all means of self-discipline, and you will be back at the beginning of trying to save up. After you have a habit of setting aside a small amount of money weekly, it is not that hard to not touch it. That money becomes something that you automatically know you cannot touch. It is just the first few months that will be the hardest as you are not in that state of mind yet.
Saving money is often about the feeling you get when you know you have done something good. Use the act of saving money to return the happy feelings you get when you spend money. Often, people spend money just so they can get the newest item so they can feel happy. If you can replace this through other means, such as spending quality time with family or free activities with friends, you will be spending your time and money on things that matter. You will also be less dissatisfied with your current financial situation, and in return, may feel enticed to save more.
Reward yourself, come up with a little reward for yourself, for example, when you have save £x you are allowed to go out for a meal or buy a take away.
Once you have made goals for yourself and gotten past the first few months of hardship, you will be in a better position financially. The ideal amount of savings to have is around two to three times of your current pay. First make your goal to one months pay, and slowly work your way up to a larger amount. By the time you have two or three times your pay, you will ensure that in a time of need, you will at least have enough money to help you get back on your feet. The sooner you start saving, the faster you will be in a better financial state.