How Much Money Do You Need to Make to Start Saving?
Isn’t it ironic that when it comes down to earning, there’s no such thing as enough money? You’re always looking out for ways to earn a little extra cash every month. After all, your ultimate plan is to start saving for personal emergencies in case the need arises.
“I’ll start saving once I get promoted.”
“I’ll balance my lifestyle and cut down on expenses once I get this new job.”
“Savings are on the way once I make £500 a month.”
“I can maintain my savings account once I reach the highest post in the company.”
As a matter of fact, the excuses are never ending and so are your expenses.
The general practice
Let’s target an average audience for a while; someone who is striving to make ends meet by the end of every month. It’s a common observation that majority of the working population adopts a certain budgeting method that aims to fulfill the necessities while also targeting to take care of some luxuries. In all this hassle, the savings part is always left behind. You think you’ll again try doing it next month but let’s be honest, that never happens.
The reality check
I hate to break the bubble but there’s no perfect time to start saving money. It’s basically now or never!
There would come no time when you’d be self-sufficient to spend both on your necessities and luxuries while making a good saving simultaneously. Thus the ideal approach is to start saving as soon as you start working. Even if it’s just twenty bucks, you’d at least have something to spend in dire times.
Developing a vision
Although saving is a necessity, it is important that you make sure to cover your basic expenses first. On an entry level salary, you might be finding it very hard to pay for rent, commute, food and clothing. However, after taking into account all these basic necessities, you can calculate how much money you’re left with at the end of every month. A portion of that money can go into your savings account while you may enjoy the rest on your entertainment and luxury shopping. This is how you plan your expenses and develop a vision for a secure future.
Getting rid of high-interest activities
It is absolutely senseless to be under high-interest debt and continue putting cash in your savings account because your interest each month would ultimately be greater than the profit earned on your savings. The best way in this scenario would be to get rid of all debt first and then develop a habit of saving.
Say no to excuses
While going on extravagant vacations and buying exclusive clothes can definitely be justified, it should never come in the way of your habit of saving money. If you’re a brand enthusiast then you can always try to cut down on other expenses in your budget. Let’s be practical – financial security is a luxury in itself.
Setting a limit
It’s not quite possible to set a certain amount that needs to be saved every month. Obviously some months would be financially harder than the others. However, you can always set a percentage of your salary that you would directly transfer in your savings account. This limit would again depend of your living situation and plans for the future. It’s not the money saved that counts; it’s the habit of saving that helps you in the long run!