Being financially savvy or intentional about your money and savings is a key trait of a successful person. For most people, saving money is a sure way to build their financial independence and security, while at the same time providing a form of protection or safety net when times get hard.
In an era of increasing uncertainty, it has become even more relevant to have some money saved at all times, to cushion you whenever the going gets tough. In this post, I’m going to share some tips that have helped me become smarter about how I handle my finances especially when it comes to saving money.
Have a budget
A budget is simply a rough estimate of your expenditure and income for a specific period of time. To have a budget you must first be aware of how much money you make and how much you spend. You can do this either with a notepad on your phone, or by having a notebook assigned specially for financial records. Mobile apps like Coinkeeper and Easyspend can help you keep track of your spending, thereby enabling you to live according to your budget.
List the various expenditures you make each month from bills to basic things like recreational activities, grocery and clothing shopping. It is key when trying to save money to ensure you don’t spend more than you earn. Therefore, after your bills and necessities are paid for, you should endeavor to leave 30% to 40% to put away as savings. The objective is to live beneath your means. A mindset of this nature will help you create the discipline now to have the kind of lifestyle you want for the future.
Statistics from a survey done by Boston College Economics Department revealed that people who use mobile money are 10.9% more likely to save than those who don’t. The various telecommunication networks in Ghana offer different saving opportunities to their customers just like banks do. Moreover, having a mobile money account sometimes helps you to curb your spending habits since cashing out is not as simplistic as using an ATM machine.
It is for this reason that exploring the option of keeping some of your money in a mobile money account might be helpful and ideal for you to save better.
Invest in fixed deposits, treasury bills or government bonds
Fixed deposits, treasury bills and government bonds are types of financial investments. Fixed deposits are usually issued by banks to depositors and can enable you to earn an interest on your money for either a period of one 1 month, 3 months, 6 months or a year. Treasury bills and government bonds are issued by the state and run for a minimum of 3 months up to 3 years or more.
This is a way to not only save your money but make money on what you save. Take time to inquire from your bank about such options that are available and don’t pass on the opportunity to make use of them.
Avoid debt and borrowing
Running into debt or borrowing are situations that can happen when you’re not intentional about your money. It is commonplace to have certain unforeseen expenses affect your budget. It is for this reason that it is key to ensure you save or set money aside monthly to cover any unexpected expenditure. Also, there are times the temptation to borrow can be overwhelming when you want to purchase something that is important or you run into a crisis. There are rare circumstances when this becomes the only option but if it can be avoided ensure you don’t borrow until it is extremely critical (a matter of life and death).
Also make sure once you do borrow, you pay off what you owe as soon as you can to avoid accumulating debt from procrastination. This can be a habit that will affect your finances in the long term. Hence, never hold off the chance to pay off anyone you owe. Similarly, living within your means will prevent you from falling into such problems in the first place.
Monitor your spending habits
Living in Ghana is not generally expensive but life in the capital city, Accra, is quite pricey. Therefore, it is key that you keep track of the things you usually spend your money on. If there are cheaper alternatives, always pick those options. For example, if you love shopping or eating out, there are sometimes luxuries you can control in your goal to save.
Avoid going to places that make you want to spend or places that are outside your budget. Also avoid people who make you spend more than you can afford. You can budget to eat out once a month depending on your income. Shopping for new clothes can be done once every three months and at places that offer great prices.
Always look out for good deals on every purchase you make; using discount coupons for your purchases will go a long way to help you save. Always exercise a little self-control and avoid impulse buying. The less desires and wants you have, the more money you are able to put aside in the form of savings.
Have a goal
Goals are like special guides that help lead us to a place we want to go. To save money in Ghana, this point is critical. Having money goals will enable you arrive at the level of financial stability you are searching for. It doesn’t matter how much you earn. Ensure you have a vision of how much you hope and desire to have in savings. You can have a weekly, monthly or yearly goal.
If you are saving for a house, a vacation, new car or to send your children to the university, goals will help direct you on how much to set aside and keep you disciplined with how you spend. It is thus important to know where you are financially and see where you want to be and then take the necessary steps to reaching there.