Tips To Help You Save

TIPS TO HELP YOU SAVE

Once you retire, Your quality of life will depend on HOW MUCH MONEY YOU HAVE SET ASIDE. this newsletter HAS some useful guidelines on Saving.

The money you save can be used to get you out of debt, and being debt free is very important. You can also invest and grow your savings over time. Look after the future you.

ESTABLISH AN EMERGENCY FUND

One of the first steps to becoming debt free is to set up an emergency fund. It is often unexpected events that make you reach for your credit card or get yourself into debt.

Getting rid of your debt is important. Make a decision not to buy on credit and if you do, pay it off as quickly as possible. Think twice before making non-essential purchases.

Ideally you need to put at least three months’ of living expenses into a separate account that you only access in an emergency.

Remember, a new car or a pair of shoes is not an emergency.

Here are some reasons why we need an emergency fund:

  • Having funds set aside frees us up mentally to make better decisions.
  • Rainy day funds give us resilience when the storms hit. They’re a form of self-insurance.
  • It keeps us from crisis borrowing and avoids excessive interest rates.
  • A cash cushion gives us less to worry about and lowers our anxiety.
  • It keeps us on track towards our financial goals. There’s no point in setting goals if the first unforeseen cost wipes out our progress.
  • It establishes a habit – the really important habit of saving.
  • It is a gateway to investing. The act of building a buffer shows us how to create a surplus which is a necessary tool for investing.
  • It empowers us and shows us what we can achieve over time. Just seeing how our regular savings can add up and earn compound interest gives us more confidence in what is possible.

It teaches us to save first and spend what is left instead of spend first and save what is left.