Savings Tips

In the world where people stress on capital growth, Savings is often an underestimated and powerful tool.

It is true that significant profits are pocketed during times of extreme good capital growth. However, one should understand that there are risks involved in holding capital items vis-à-vis savings which is risk free. For example, capital items can also lose their value during times of poor economy. Or, you may find yourself in a situation where you had to liquidate the capital item for less than what you paid for it.

Here are 4 Tips to Save Money

Many people’s wages just enough cover their living expenses, like rental, car and personal loans, and groceries. However, if you are seeking financial security, you have to acquire more money than what you spend – so that you can put this money in an investment in a business or in other ventures that can propel you to financial freedom. To be able to do this, you have to start developing saving habits early in life.

Here are some pointers regarding saving money:

1. Earmark a minimum amount to be saved. Savings are not meant to cover bill payments should one fall short of cash. They are intended for financial security. A little savings, in time, will become big; and it can be used as investment capital to earn more. Question: “Where will I get the cash I need should I fall short of it?” The answer: “Find other means of earning extra income, say a weekend part-time job. Any excess cash from one’s part-time job can be added to your savings.

2. Shop only for necessities, and restrain from impulse buys. Think first before you purchase. Separate the have to have from the nice to have. It will pay dividends later. Don’t fall prey to bargains not needed. Restrain the use of the credit card.

3. Review your lifestyle. Change or scale down habits that seem to be extravagant. For instance, you do not need to go to the top hairstylist, or go eat at expensive restaurants. Try to look for value for money. Take the bus or train when possible, instead of driving as you can save on gas, parking fees and highway toll charges. If you must drive, try car pooling with officemates or neighbors to cut down on these costs.

4. Monitor your regular monthly bills on utilities like electricity, gas, water, and telephone and constantly challenge yourself on which areas you can save. For example, it is quite common nowadays to own hand phones, so is your land line necessary? Also, water from the washing machine can be used to water the lawn.

It may take a while to get adjusted to a lifestyle in the “savings” mode, even to the point of “little sacrifices.” Adapt a gradual, progressive change to save to lessen the impact of adjustment from the lifestyle one used to be accustomed to.