Often, the hardest part with regards to saving money is to start doing it. Most of us lack the motivation to save, thinking that they will just start doing it on their next salary. Their next salary will come, and the same excuse will be given. Do not be like those people, and get started on your savings now. If you’re looking for tips on how to save money in Singapore, we’re here for you!
Set up an automatic deposit for your savings
Establishing an automated savings account is one of the quickest and most efficient methods for saving your hard-earned cash. Automated savings can be set on an interval of your savings, meaning that you can set up automated deductions from your main account to your savings account whenever you like.
Some employers also have schemes where their employees can choose where the cash goes through an automated savings scheme whereby some of their monthly income is diverted into a savings or retirement account. Such accounts allow the employee to only spend what is inside their normal bank account, instead of spending everything away frivolously.
For those who are business owners themselves or are self-employed, automated savings can also be arranged with their banks as an alternative.
Automatic savings is an extremely effective way to get started on your savings since there is no room for forgetting or intentionally making excuses not to. Once it is set up, it will automatically save your cash for you.
Do not forget to include an emergency fund when starting to save
An emergency fund will greatly help you in case something unexpected happens. A good rule of thumb is to keep approximately 6 months of your monthly expenses in a different account. The cash can be then be used when you have an accident or an emergency. Having an emergency fund will provide you with a sense of security for such events that will otherwise harm your finances. It isn’t however, meant to fuel your shopping or traveling expenses.
Strike a balance between paying debts and saving money
Financial obligations tend to be a major hindrance to getting started in saving money for a lot of people. For example, if you have a credit card debt that has a 20% interest rate while only making the minimum repayments to support your lifestyle and a compulsive need for buying and shopping all the time, you might not have any left for your savings.
This is why it is important to strike a balance between paying your personal debts and saving money. You should prioritize paying your debts that have a high interest first because for as long as those debts are incurring interest, you will barely have money left to put in your savings account.
However, even if you are already paying your debts, do not skip out on your savings. Even a small $100 savings a month will do since it will eventually grow. Having some saved will allow you to be debt-free in case you’ve had an emergency situation.
As a rule, you should make setting high-interest rate loans a priority. You can afford to slowly pay low-interest debts since they will not cost you that much compared with a high-interest loan.
Document your expenditures
One of the essential steps to do when saving money is to determine what you’re spending on. Keep an eye on all of your personal expenditures, even negligible ones like cheap supplies or that snack you’re buying along the way to work. When you have all the information about your expenses, arrange their figures by their types, like gasoline, household goods, and bills.
You can use the statements from your credit card and banks to make sure that the amount you’ve spent is correct. You can use a spending tracker to make this task easier to do. There are applications available both for PCs and smartphones, so you can easily do this regardless of which device you use.
Documenting your expenditures will allow you to see which category of expenses are consuming into your paycheck. As such, it will allow you to work on reducing those expenses. The cash you will save from those reductions can then be allocated to your savings.
Start cutting down on your excessive expenses
Now that you have data on the entirety of your expenditures, you can now cut down on expenses you don’t truly need. Limit your dinners on expensive restaurants to once a month at least. Additionally, you should cut down on monthly subscription services such as gym subscriptions, Spotify, Netflix, and other types of service subscriptions that automatically renew every month. If you are barely using those services. It is a good idea to just cancel them and put the subscription fee on your savings instead.
Put unexpected bonuses to your savings instead of wasting them
The majority of people tend to be more wasteful when they receive an unexpected sum of cash, such as tax refunds, bonuses, or lottery winnings. To them, that cash is not earned and they did not work hard for it (except for bonuses), so the norm is to spend them in an extravagant manner. Avoid doing this and put your windfall into your savings account instead. You can still treat yourself with the windfall, but you should dedicate a significant portion of it to your personal savings.
Avoid impulse purchases
The best way to avoid impulse purchases is to wait at least 1 day or if you can, a week before committing to a purchase. If a product was just released, you might be tempted to purchase it as soon as you can. The best thing you can do is to wait for the hype to cool off, and wait for user reviews of the product to see if it really lives up to its reputation. You just might find yourself disinterested in the product after all, saving you the cost of the item.
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