For many of us, every penny counts right now. But it is also important if possible to save money should you need it. This could be for an emergency or a holiday. Whatever your needs, a bit of planning can see you get some money put aside. We took a look at creating a savings plan.
Creating A Savings Plan- Keep On Top Of Your Budget
Having budget control is essential to saving success. If you haven’t already, set aside time each month to review your previous month’s spending, identify areas for improvement, and congratulate yourself on your accomplishments before moving on to formulating a plan for the next month. Once you’ve got your budget under control, you’ll be able to see how much money you have available each month to put toward your savings plan.
Options
You may find that you are budgeting but have no money left over to put into savings. There are two options for dealing with this: either reduce your spending or increase your income (or a combination of both). You will be able to readily determine where you are spending your money and, as a result, where you can make savings if you have a firm hold on your budget.
Free Money – Cut Spending etc
There will be expenses, necessities, for which there will be no way to save money. It’s a good idea to divide expenses into two types: necessary and non-essential. Then, in order of priority, rate the non-essentials. Once you’ve determined which of your non-essential costs is the least important to you, you’ll begin making cuts there, gradually working your way up the priority list until you’re able to reduce the amount you wish to contribute to your savings target.
The alternative is to improve your income; there are many ways to do so other than taking on a second job; we have a lot of them on our site that work around busy schedules, so be sure to look into all of your alternatives.
Creating A Savings Plan – Set Goals
Defining objectives is vital, but setting goals correctly is crucial to accomplishing them. You may recall learning about SMART objectives as a kid, a goal-setting technique that boosts your chances of achievement.
This means that these objectives must be: – Specific – Measurable – Achievable – Timely
“I’m going to save £50 a month for the next 12 months to put towards my auto maintenance sinking fund,” for example.
Let’s break this goal down: it’s precise, and it’s for the purpose of establishing a sinking fund. We know where the money is going and what will be done with it. It is measurable in terms of a monthly predetermined amount rather than “I’ll just save a little every month.”
– It’s doable because it’s not a large monthly contribution, though you should consider it in the context of your budget.
– It is pertinent to the requirements of car owners.
– It is limited in duration, as it lasts only 12 months.
Creating A Savings Plan – Planning
Ultimately, your success depends on planning your financial affairs. Additionally, ensure you stay on top of what you earn and what you spend. By looking at your accounts in more details, you may be able to tidy them up and be better off for it.
