It is fair to say that everyone is familiar with a situation where you have already decided to save up a particular sum of money for something. You make a firm decision to save some pennies after your paycheck, and you already have some savings. However, they never stay in your account for a long time. You keep wasting it on something that seems like cheap and affordable.
What should you do in such a situation? How to learn to save money and invest it instead of wasting it?
There are five important steps:
1. The golden rule of saving says that money should be put away before you have enough time to spend it. Once you get paid, take that 10% to your savings account and live without it.
2. Never store the savings in cash at home. That is the fastest way to spend them at the first opportunity. You will be constantly thinking about their presence every time you glance at those eye-catching sales. You will suddenly realize that you actually need a particular item and can’t live without it. Believe it or not, you can.
3. Her majesty cash-back. It is highly recommended that you get a cash-back card. Use it every time you go shopping. It is preferable to stop paying in cash. As soon as you have saved a reasonable amount of cashback, don’t rush to return it to your card and spend it. Put it into your savings account. Do the same thing with the interest rate on your account, as it comes every month. Remember: put the cash-back into your savings account as soon as you get it.
4. Stop checking your savings account. Try to forget about the money, as if it doesn’t exist at all. Don’t give up if the first few months haven’t brought you six figures. Your capital forms gradually. Give yourself some time, and you won’t regret it.
5. Last but not least. Make your money work since day one. This approach will help you to see the progress; as a result, spending won’t be that tempting. Your excitement will prevent you from doing so. For starters, keep your money on your saving deposit. Slowly but surely, you will notice how your money grows, and your capital is formulating faster and faster every month. That is how compound interests work.