Our saving journey differs based on what goal we want to reach and how long it will take us to get there. However, we have all experienced the temptation of either dipping into our accounts to cover small expenses, that can easily snowball into more money being withdrawn.
Saving doesn't only require discipline, but adequate planning for those moments that catch us by surprise. Here is what you need to know when it comes to sticking to your goal even when the going gets tough.
Evaluate where you are currently at
To move forward, it’s important to look back to see what went wrong. Simply scrapping everything and restarting without knowing what your triggers are that keep you from reaching your goal can see history repeating itself.
Checking your budget will also play a pivotal role in reaching your savings goal. You can print out a three-month bank statement that will give you a clearer picture of your income versus your expenses.
The aim is not to sweat
Who doesn’t want to see their saving goal reached in a short space of time! But good things take time. When it comes to being able to stick to your saving goal, even when it seems like there is more month than money, setting a realistic amount is key.
The aim is not to sweat. Start off with something that you will be able to maintain over an extended period, even when the going gets tough. The general rule of thumb is to save 20% of your income on a consistent basis.
Having this amount debited from your account as soon as you get paid can be convenient when it comes to sticking to your goal. Keep in mind to keep your budget updated to avoid having to dip into your account to cover unexpected expenses.
Avoid keeping your eggs in one basket
There are many things that prompt us to open a savings account. According to a financial report released by Old Mutual, the top three things that prompted South Africans to open a savings account were being able to cover funeral expenses (38%), retirement fund (33%), and emergency/rainy day funds (30%).
However, you will soon realise that there are many things that need to be saved for. This is where financial planning is crucial. Speaking to a financial advisor can let you know where and how you can invest your money.
What you can consider is looking for saving accounts that have a better interest rate to grow your money. Having life cover is something that you also need to consider protecting you and your loved ones from life’s unforeseen moments. While investments are one of the most talked about financial portfolios when it comes to growing your money, it is important to keep in mind to start off small and slowly grow from there.