MAKE A GOOD DECISION: 5 steps to the easiest way to start SAVING
New Year’s resolutions often come with a desire for change and progress, and one of the most common – and perhaps the most important – is the decision to start saving. That is why BIZLife launched a series of articles called “Make a good decision”, through which we will give you practical advice and ideas on how to be the best version of yourself in 2025.
Although saving can seem like a challenge in today’s fast pace of life and prices, the new year provides the perfect opportunity to reconsider and set goals that will enable us to have a more stable financial life. Whether it’s short-term savings for travel or long-term retirement planning, this year can be the start of a change that will bring security in the future.
Sometimes the hardest part of saving is just getting started. This guide on how to budget and save money can help you develop a simple and realistic strategy that fits your needs.
Money, savings (Freepik)
How do I start saving money?
Start by tracking your expenses. The first step to saving is to figure out how much you spend. Keep track of all your expenses – this includes every coffee, household items, tips, as well as regular monthly bills. Record your expenses in the way that’s easiest for you – a simple spreadsheet, a free online spending tracker or app, or even pen and paper. Once you’ve collected the data, organize the numbers by category, such as fuel, groceries, and outings, and add up each amount. Use your cards and bank statements to make sure you include everything.
How to include savings in your budget?
Include savings as a monthly expense. Now that you know how much you spend per month, you can start budgeting. Your budget should show your expenses against your income, so you can plan your spending and limit overspending. Be sure to include expenses that occur regularly, but not every month, such as car maintenance. Enter a savings category in your budget and strive to save an amount that is realistic for you. Plan to increase your savings over time to as much as 20 percent of your income.
Novac (Freepik)
How can I save money on a limited budget?
Save on wishes. If you can’t save as much as you’d like, it might be time to cut back. You can get ideas on where to cut back on spending by comparing your spending to that of others.
First, identify unnecessary expenses, such as entertainment and going out, that you can save on. Then look for ways to lower your fixed monthly expenses, like car insurance or cell phone plans.
What savings goals should you set?
Use goals to make savings meaningful. Working towards specific goals can be one of the most effective ways to save money, as it puts a reward or achievement within your reach. Start by thinking about what you want to save for – both short-term (one to three years) and long-term (four or more years). Then estimate how much money you will need and how long it might take you to save it.
Young people, savings (Pixabay)
How do I decide which savings goals are most important?
Learn how to prioritize your savings goals so you have a clear idea of how to allocate your savings. Once you’ve looked at your expenses and income, your goals will likely have the biggest impact on how you allocate your savings. For example, a frequent dilemma in budgeting is whether to pay off debts, save or invest first. This interactive tool can help you make a decision.
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Source: BIZLife/Mladen Stanković
Photo: Canva/Freepik/Pixabay
Source: bizlife.rs
