When you come to think about it, you will realize that the hardest thing about how to save money is starting the saving itself. Consulting with a qualified expert from Lendgreen is a good way of getting a few pointers with regards to managing your installment loans. And even after you have managed to save, the stress lies with how you will spend these savings so you can pursue any one or all your financial goals. Here is a step-by-step guide for you to follow if you want to realize a savings and loans plan that can work well for you.
- Record your expenses
The first step you must take if you want to save money is to realize how much you usually spend on a daily basis. The best way you can do this by taking records of all your expenses. This simply means that you will record that coffee you took in the morning, the newspaper you bought, the bite you took on your way to work. You just need to be able to account for every penny you use in your daily endeavors. You can then organize the data you have collected into categories like gas, mortgage, groceries, and then you total each amount. Bank statements can help you a lot with this.
- Make a budget
You should now have an idea of everything that you spend your money on; you can move on to organizing your recorded expenses into a budget that you can easily work with. Your budget will help you plan your spending and prevent you from overspending. You can also factor in the expenses that occur occasionally, but not monthly, like car maintenance.
- Plan on how you can save money
You can then create a savings category that lies within your budget. You can start by putting away 10-15% of your accumulative income in savings. If you realize that your expenses don’t allow you to save that much, then you should consider cutting back. You can do this by identifying the non-essential items that you can spend less money on or do away with, like entertainment for instance.
- Choose what to save for
You can set yourself a goal on something that you want to achieve and can only do so by saving. Anything that can motivate you to save can be the best bet to place here. After you have figured this out, you need to know how long you will have to save to achieve the income you need to realize this goal.
- Decide on your priorities
Now that you have set up all your expenses and income, your goals need to be the key motivator in your saving endeavors. Make sure you do not forget your long-term goals. You may focus more on your short-term needs and forget about your plans for retirement, for example. You must know how to prioritize your goals.
- Pick the right tools
For short-term goals, you may want to consider using the following FDIC-insured deposit accounts:
- Certificate of deposit (CD)
- Savings account
If you are saving for long-term goals, you may want to consider:
- FDIC-insured IRAs, that are tax-efficient savings accounts
- Securities like stocks
- Make saving automatic
Many banks now offer automated services where funds in your checking accounts automatically transfer to your savings accounts. It then lies upon you to decide when, and how much money you want transferred. This is another great way to save money as you do not even have to think of the money, in other words, it reduces the temptation to use the money.
- See your savings grow
It is best that you always check your savings regularly, preferably on a monthly basis. This not only helps you to stick to your current savings plan, but also help you identify any problems that you may realize about your savings and fix them promptly.