HOW TO CREATE AND GROW YOUR SAVINGS OUT OF LITTLE INCOME

As you watch this video below, keep in mind that $50 saved is better than $0 dollars, and even $10 saved is better than $0. It is your commitment and drive that will help you to consistently apply the strategies shared in this video and will keep you motivated and focused.

Here are the strategies to create and grow your savings out of little income

Know where every money you make is going

My question to you at this point will be: “that income you make, what do you spend it on? Knowing where our money is going is a habit most of us find difficult to keep, but you will find this to be a very important key to your financial success.

The best way to know where your money is going is to “track your expenses!” You might consider this to be a difficult task. You may also prefer to have other options or other things you can do to increase your savings, but these things will start making sense when you are able to track your expenses. Because tracking your expenses will allow you to see how your expenses align with your income. You can easily tell if you are spending your income the way that allows you to maximize your savings. You will be amazed at what you will discover. The first time I tracked my expenses; I said to myself, “I can’t believe I spent this much on clothing alone!” Where is your money going?

Cut your expenses in a way that your well-being is not affected

[bctt tweet=”One of the popular recommendations out there is to cut your expenses, but I will tell you now that it is not enough to just cut your expenses, you have to know how to cut it so your wellbeing is not affected. ” username=”wealthygen”] When you track your expenses, you are able to identify the expenses that you don’t really need, then you can channel those resources to savings. Continue like this, stay committed and consistent, and you will see your savings grow.

Save a portion of your income first before you begin to spend

This is another important strategy that works like magic. A lot of people like to begin spending their income with the hope of saving at the end of the period if there is any amount left after they spend. Let me be the one to tell you that something will always come up that you will need to spend on, and so you may never be able to save. The best strategy that works (only if you try it) is to take a predetermined amount and save it once you receive your income, then start spending only what is left.

Save only what you can afford

While it is recommended to save 20% of your income, this is nothing but a recommendation. Instead of choosing to save $300 monthly but you only stop after a few months just because you can no longer keep up with the savings. You are better off saving only $50 and you consistently save this $50 every month. You will make your daily life a lot easier and your savings will steadily grow.

Invest your savings

I leave you with this challenge; track your expenses just for two weeks, come back and share what you discovered!

After you have saved a certain amount, take all that you have saved and put it into a short-term investment where you can earn more interest such as fixed deposit, money market, treasury bills, etc. Continue, stay committed, save! save!! save!!! No matter how little! When you have saved enough to meet your current expenses and emergencies, then you can start investing for the long term.