Making a savings plan will help you to be more successful on your journey to better savings. It will help to keep you accountable and discipline. Most often if there is no plan in place or necessary tools to help along one usually tend to get discourage. While making the plan is simple the discipline to stay on the plan is very challenging.
Here are some simple tips to assist when setting up the savings plan.
Set a realistic goal
Start by setting a savings goal. It should be measurable, realistic and timely. You might feel ambitious and set a super-high savings goal, but you’d likely be setting yourself up for failure.
When deciding on a savings goal, think of a specific purchase or benchmark you could realistically reach in 12 months. The goal should require self-discipline and a little sacrifice when it comes to spending (it is a goal, after all), but you shouldn’t overreach.
Then, find a friend or family member who can hold you accountable, or write down the goal in a place where you’ll see it every day, like your planner.
Keep track of your spending
For one month, track every single penny you spend. You’ll learn exactly where your paycheck is going and where you’re overspending.
You might realize, for example, that you’re spending an obscene amount on coffee every week. Once you’re aware of that, you can limit your coffee-shop stops and put the rest of that money into savings.
Set a budget
Once you know your spending habits, you can create a realistic budget. Budgeting will help you save by helping you cut out frivolous spending. It might be a trial-and-error process until you figure out what works best for your lifestyle.
You don’t have to cut out all of the fun stuff, but you do need to pay your bills on time and eventually meet your savings goal.
Evaluate your Progress
In order to save effectively, you need to know exactly where you stand with your finances each week. Make a “money date” with yourself every Sunday and go through your transactions to ensure you’re on track with your budget. If you fall off track (maybe you spent too much one week or didn’t sock away a single penny from your paycheck), don’t give up! Get back on track.
When you hit savings goals, celebrate and reward yourself a bit. Saving is all about moderation, not cutting out shopping and spending completely.
