I am sure you have been faced with the challenge of saving money and have wondered how people manage to do it. The truth is, the hardest thing about saving money is getting started. Many people have a hard time figuring out simple ways to save money and using their savings to fulfill their financial goals.
But do not panic, you can always start today. You can either do it on your own or take a look at the latest SMSF news to find out more about what it takes to set up your own Self Managed Super Fund.
If you have no clue where to begin, stay with me and follow our step-by-step guide to help you develop a realistic savings plan.
Record Your Expenses
What you should know is that the first step towards saving money is to know how much you are spending. That is to say, try to keep record of everything you spend for a month – this includes coffee, newspapers and whatever you purchase. After you have all the data, organize the numbers by category and get the total amount for each one.
Make a Budget
Since now you have an idea of where and how much money you spend in a month, build a budget to limit over-spending and make sure you put money aside in your emergency savings fund.
Set a Plan
Consider your monthly earnings and expenses. Create a savings category and try to leave aside at least 10-15% of your net income monthly. If your expenses or earnings do not let you save that much money, it is high time to cut back on some non-essentials such as entertainment and frequently dining-out.
Set Saving Goals
Having goals to achieve makes it much easier to start saving. Decide and calculate how long will it take you to reach each goal. Most common short-term ones include saving money for vacation or buying a new car. On the other hand, long term saving goals are usually a few years or decades away and include saving for retirement, putting money away for your children’s education, home remodeling etc.
Not all people have the same priorities when it comes to saving money, that is why you need to decide in advance which goals are more important to you. Therefore, decide for how long you can wait in order to save up money for a particular goal and how much do you want to put away each month.
Furthermore, if saving up for retirement is your main goal there are a few effective ways to save. One of the most popular ones in Australia is the Self Managed Super Fund (SMSF). Browse the latest SMSF news and inform yourself more about it. Organize your goals by priority and start saving up.