Practical tips for successful savings

The first step to wealth creation is savings because this enables you build the capacity for moving to the next level. Many keep asking how much they should earn to start savings, but experts insists that no matter how much you earn, you can actually start saving from there.

According to the experts, your goal should be to save at least 10 percent of your pre-tax earnings. Consider paying yourself first by starting a regular savings plan that could form the backbone of a fund from which you will be able to draw money to cover the necessities of life.

Whether you are saving for a major purchase or for your retirement, you will never reach your goals unless you make savings a priority. Little changes can add up to big savings on expenses. Those savings can be put to good use for achieving your long term savings goals.

Are you a spender or a saver? Be honest with yourself and select investments that will provide you with the discipline you may need.

Make savings fun

Turn savings into a game. Instead of force feeding budgeting tips to yourself, look at this as an adventure. Try to top your own savings each month or compete with a friend. Make savings a family affair – have a fun programme of savings for everyone to enjoy.

Consider having a kitchen jar to save money for a family holiday. You might want to give yourself pocket money allowance. The key is that your spending should not exceed your allowance. After the money is gone, it’s gone.

Getting started with a savings plan

Don’t neglect tomorrow due to extravagance today. If you need to start savings, start TODAY! Procrastination is enemy no 1.

Invest when the market is low, its sale time! It’s important to invest for the long haul and be prepared to ride out the highs and lows.

It may help to draw up your bucket list and separate it into short, medium and long term goals. This will play a large part in selecting appropriate savings vehicles to achieve these goals.

Create a Budget

A great way to help save money is to create a budget, and then stick to it. Even by just tracking where the money is going, you will be more aware of your spending habits and eliminate unnecessary spending. One of the best ways to save money is to never see it. Set up direct debits and designate that some of your money goes directly into a savings account.

Keep a money jar that you can throw all your change into each night is a great way to save money. Plus, if you keep a note of how much you spend, you will be able to calculate how much your day-to-day living is costing you.

Avoid temptations such as special offers popping into your mailbox daily, unless it’s something you have been looking out for specifically.

Saving for retirement

Retirement should not be regarded as a point in time but rather as a period over which transition is made from living off earnings to living off savings. When you cannot work in old age, your money will be working for you.

You must start early enough, and you must save enough. If you leave off starting to save for retirement from 30 years before to 10 years before, you will have to put away 10 times as much each month. Take retirement savings seriously and do more than your parents and grandparents did.

Saving for education

Savings funds can be set up long before it is known exactly where they will be needed. Save a bonus in an retirement Account and each year after that top it up by the amount saved in tax from the previous year plus the amount by which the bonus for the current year exceeds the bonus from the previous year. Double up on money saved by your children to encourage them to develop a savings habit.

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