Clever ways to start saving money
Many schools today teach a lot about finance and accounting but not many teach on how to save money. Having come from a country where there was hyper inflation I must admit I do get caught up most times with wanting to spend all my money as quickly as it comes and not saving for tomorrow. Here are some ways that I discovered of saving my money after having read an interesting book called the richest man in Babylon, you can easily find a copy of this book on Amazon or on iBooks for less than $10 the link for Amazon is given below and trust me it will be a good investment.
1. Save 10 percent of what you earn
one would probably argue that if I can't make ends meet already how can I save ten percent but the surprising thing is if you put it aside as soon as it comes you won't even notice that much that you are ten percent short. This method will ensure that you begin saving and at the same time still have enough money left over to enjoy your life.
2. Start earning income from your savings
After accumulating those pennies it is quite tempting to use some of the money to buy the latest ipad that you have been wanting for a while but as the good book puts it its like you are eating your workers! Let that money work for you and let it have children and grandchildren that will all work for you.
3. Invest wisely
Now this is the tricky part. Instead of letting your money sit invest it in a high interest bank account or otherwise have a look at other ways to invest be it in stocks or bonds but be careful where you invest your money do some research to ensure that your money will be safe remember it is easier to loose money than to obtain it.
If possible cut them up! They are the fastest way to sink your financial ship. Most credit cards charge a high interest rate of sometimes up to 18%. According to most financial advisers who I have listened to such as the Barefoot investor and Suzie Orman it is much better to make paying your credit card off a priority rather than putting your money in savings because a high interest savings account will give you way less interest than the amount that the credit card company charges.
According to Robert Kiyosaki's Retire young, retire rich If you are very disciplined on how to use your credit cards you can leverage the debt by using it to buy things that will earn you more money if for instance if you use your credit card to buy products for resale at higher value such that by the time you pay off the credit card you actually have some left over.
5. Keep track of your finances
It is very important to know what your financial position is at all times. This will enable you to realize when you can spend and when you can hold back. One way that you can use to harness your spending is by having a budget. Structuring your money and the way you spend it will help you control the amount you spend. If you are like me and couldn't make a budget to save your life just ensure that your money goes to priorities like savings, rent and expenses before you even think about spending it on a purse or shoes. Remember your savings account is a loan shark that must be paid!
A funny clip on lending money
6. Lending money
Have you ever had that friend that borrows your money and never pays back? Ya we all have had those. It is a good thing to help but you don't want to lose your hard earned money to people who are not trustworthy, If you must lend them money give them an amount that you can afford to lose so that if they don't pay back you don't get a heart attack. To avoid such a situation however do a background check on them by asking other friends how trustworthy they are if they are not so reliable try and see if they can give you something you can hold on to that is worth that much money
7. Frugal frugal frugal
According to the book a millionaire next door a study they had showed that millionaire's were very frugal people they also looked for coupons in the paper they also loved buying stuff at half price. I dislike being wasteful that is why at my uni when they say come for free food I won't buy lunch and leave the free food, they said free! all you have to do is walk there. If they say free coffee and tea I am not going to buy coffeee for four dollars, and leave the free one for who? Saving not spending money is what makes you a millionaire. Minimise your spending and impulse buying, write a list before going shopping, and there are things like electricity that you could save money on by just switching off devices before you leave the house or after use. Once you got these steps going you are well on your way and hopefully your savings will double themselves in no time. Hit me with some questions and comments below.