Not everyone can manage their finances well, including Milennials. With online shopping becoming so pervasive and easy to perform, it could make managing money a little more challenging. However it is not impossible, and spending less and saving more can be made easier if you practice these 6 habits on how to save money.
1. Have a Clear and Realistic Target
Many find it difficult to save money because they lack clear and realistic financial goals. Start to define the target, how much money to save, and most importantly, why you have set this target. Divide your financial targets into short, medium and long-term targets. Clear and achievable targets will set you on the right path to achieving financial freedom in the future. Do not forget to do weekly evaluation and check your progress milestones.
2. Create a Priority List
The priority list acts mainly to curb one from spending unneccesarily. Make a list of your spending needs each month, and rank them in order of importance. Also think about how urgent each item is. This list can help you realize how many of these “needs” are in actual fact just wants.
3. Create a Spending Budget
Divide your spending to cover at least 5 parts: cost living, education, business/investment, entertainment and savings. These are important and basic expenses. By creating a spending budget early on, you can ensure to allocate more on important needs. To help you develop and keep to this habit, you can ensure to allocate more on important needs. To help you develop and keep to this habit, you can use budgeting apps that are both desktop and smartphone friendly.
4. Compete on Savings
Get others involved by holding a savings competition with family, close friends, or even your co-workers. The one who saves the most wins the challenge, while the loser gives a prize to the winner. This challenge does not need expensive prizes so a simple dinner together can be a meaningful prize. It is not just solution to saving money together, but also strengthen ties of kinship between family, friends and co-workers.
5. Limit Spending on Every Mid-Month
Especially to those who find it very difficult to save money, you can start with this one-day challenge. You must commit not to spend on the 15th of every month unless if its really important or cannot be postponed. You may find it difficult at first, but once you get used to it, you can instill the same discipline on every other day you wish not to hold back or curb your spending.
6. Start Investing
Once you are successful in building up a substantial amount of savings, the next important step would be to manage it. You can seek professional financial advice to assist you on this important step. Investing can be an attractive option compared to bank deposits, provided you understand the risks and returns of investing. Approach a professional financial advisor before you take on any investment decisions.
Kapital Boost is an ethical crowdfunding platform matching SMEs with retail investors looking for short term investment with attractive returns 18-24% per year. We offer investments that are transparent and Shariah-structured.