How to create a savings plan
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Do you have savings goals that you fantasize about? You can’t stop picturing what it will feel like when you achieve that goal.
Maybe you are simply trying to save for a dream vacation, maybe a car, or even a goal as big as buying a house.
The problem is that setting an amount you will like to save is the easy part. Too easy in fact.
But the actual saving itself is so difficult because it involves a lot of discipline and consistency. Add to the fact that a saving period makes time seem like it is dragging. It would seem as though it is going to take forever for you to achieve your goal.
But, it is possible to reach your savings goals.
There are simple things you can do that can help you achieve success and avoid the frustration of failing to reach your goals.
One of the major benefits of creating a saving plan is not just in reaching your financial goals but also in the habits that you cultivate along the way.
Without further ramblings, here are my top tips to help you create a savings plan that you can follow through with
1. Define your financial goals
If you don’t know where you are going, how do find the path that is right for you?
You need to know what exactly you are saving for, how soon you need it, the urgency, etc.
If you are saving for something more serious with a timeline that isn’t flexible, you most likely will need to be stricter with your savings.
If you are saving with a more flexible timeline, like saving to create a safety net for yourself, a slow and steady approach might be more suitable for you where the amount you save might not be a lot at a time and will not require you to alter a lot in your current lifestyle.
This can help you maintain it for a longer period.
2. Analyze your current finances
After deciding for certain what you are saving for, an important next step will be to analyze your current finances.
What responsibilities do you have?
Are you currently in debt that you need to make payments on?
Analyzing your finances will help you set a realistic standard of what you can save and the timeline.
I am emphasizing the importance of taking your time you intentionally go over your finances because when it comes to setting goals for how much you want to save, it is very each to be super ambitious and overestimate your capabilities.
Analyzing your finances is a good snap back to reality.
3. Tract your expenses for a month
Take my word for it when I tell you that the result of this will shock you. This is because you will be amazed by how the little expenses that you pay no attention to add up to something pretty substantial.
Before you create a savings plan, track all your expenses for an entire month.
To make this less daunting, you can choose to tally your expenses daily at the end of your day or weekly at the end of each week.
Making payments with cards wherever possible will also make it really easy to track your expenses. If you however paid with cash, make sure you take a picture of the receipt before you lose it.
The importance of embarking on this quest is to see where your money goes and which areas you can make some changes to help you save more.
It is important that you don’t make any changes to your spending habit during this period. You want an accurate picture of what your spending habits normally are.
4. Create a realistic budget
If you didn’t have a budget before, it is time to create one.
If you are new to budgeting, you will like this post I wrote on An easy way to Budget and save money. It will help you to easily create a budget that fits your needs.
When creating a budget, remember, just as I mentioned above, not to get so ambitious and set an unrealistic one.
It is easy to believe you can cut out so many expenses and live on much less but a drastic change like that is a recipe for failure. And, failing can be discouraging and can leave you feeling defeated.
5. Adopt a more frugal lifestyle
Make a conscious effort to adopt a more minimal lifestyle and focus on what is important.
Adopt a more frugal way of living to help you make the most of your money.
In this post 10 Super easy ways to spend less, I share some ways that I save money without sacrificing the quality of my lifestyle.
One such example is planning my meals around groceries that are in season. It seems like such an easy tip but it helps me save a lot of money on groceries.
6. Use the Revolut app to automate your savings
From the moment I started using this app last year, I can’t sing its praises enough. It has almost entirely replaced my regular bank account.
Revolut is a financial app that helps you manage your money in every way you can think of. They are registered as a bank in Ireland so you can get a virtual bank account when you make an account.
I recommend using this for automating your savings as it makes it super easy. You can set a savings goal and it creates a savings account where you can monitor your savings.
Another function I enjoy from Revolut is the security they offer when shopping online. You can create as many disposable virtual cards for online purchases and not have to use your actual card.
Revolut is free to use, why not create an account and see for yourself? I am sure you will love it as much as I do.
Over to you!
You made it to the end of this post on how to create a savings plan. I hope you got some inspiration from the few tips that I gave in this post.
To have a successful saving plan, you have to keep it as simple as possible and stay away from unnecessarily complicating it which can lead to frustration.
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