Saving Tips for Starters 2021

Congratulations! It's your payday! How about some new pair of shoes or the latest model of Samsung Galaxy Series? (While supplies last!) Or treat yourself to a grand vacation?

Wait a minute.

You may be Lucy, the person I am talking about just now, or you can be like her friend, Elle.

Elle earns a lower salary than Lucy does. However, Elle has more financial independency than Lucy does. Why? Because Elle knows how to save.

Instead of pondering about the new things and expenses she must incur, Elle plans about how her income can be distributed well to her savings first, before the expenses.

Are you Elle? Then, good for you. Right now, you may have achieved a lot of your personal financial goals because of your attitude towards money.

Or, perhaps, are you Lucy? Then, you may want to stay here. Knowing even just basic tips to financial independence can make your life better than ever.

I was that Lucy, before. But I can't say that I have become like Elle, too. I am still currently adjusting to this transition I decided to commit. It's for my good, anyway.

In this article, I will tell you some of the habits I started to develop towards money management. You can add more in the comment section, if you are a starter just like me. Let's help each other!

1. Practice the right principle

Maybe only a few people know about the proper principle of handling financial matters. Take a look at the figures below.

Which kind of saver are you?

This is one of the things I learned from my college Economics professor. I managed to save this information, but I only realized its importance now. Education really matters.

You might be surprised to know that the second one is the correct way of managing your income. This strategy has been proven to improve your financial character, encouraging you to portion a separate amount immediately, so that it will not be expensed.

The first one is wrong, as most of the time, nothing is left after all the expenses. Therefore, no savings. What would you have when situations arise? Worst case scenario is you being in debt to point of no recovery.

2. Start with what you can

Saving is not one time, big time action. You can start with getting at least 15% of your income and keep it as savings. Then you can just gradually add a bit more as time goes by, making it a habit for you.

I personally started with 12.5% as of now, as I have only one source of income. By the time I can earn well in read.cash, too, or other platforms, I will increase the percentage so I can accumulate a larger amount faster.

3. Spend less than you earn

It's a basic yet most forgotten principle in saving. Only spend when you are able to easily pay it. As much as possible, avoid debts. When you start to expend on things you only need, rather than those that you only want, you will see a positive difference.

I used to be like this in the past. Tell me, if you relate, too (haha!). So before my salary even comes to my hands, I already have an imaginary computation on where it will be spent, you think of it: bags, new set of earphones, phone case, and other stuff that I don't really need.

Now, I have decided to ignore the notifications from my online shopping apps, even they really are tempting. I can do it! You, too! You can even start uninstalling those shopping apps that reduce your ability to save.

4. Avoid debts as much as possible

I have sad it earlier, but I should elaborate the thought here. Don't buy things that you cannot still afford. You may have the thing that you wanted, but you'll be losing a great deal of freedom in managing your money.

You might say, "I am not even owing that big of an amount, losing freedom is too much." You may be right, but let me warn you: Spending through credit is addictive.

You may spend just a few hundred and charge it as your liabilities, thinking it's not much and that you can easily pay the amount. Then one day, you'll just realize you can't pay even the principal because the interests on your debts may have gotten even more costly than it.

Don't repeat the history of the people who are not able to rise from the tunnel of debts. It's better to live simply and enjoy a worry-free life when future comes.

5. Save, and invest too.

Don't let your savings just stay there under your bed, or inside your cabinet. Rats may eat it, or worst, some unforeseeable events may take it away.

Deposit it in a bank of your choice, preferably, one that has higher annual interest rate. In the bank, at least, your money grows and is more safer. There are different kinds of bank savings, make a choice on how you want your money to grow.

I personally plan on opening a savings account and accumulate enough amount to enroll in a Time Deposit. There, the money earns a higher interest than the normal banking rates, and it has a fixed maturity, where I can't withdraw the amount, unless under certain conditions. So it will just stay there, and grow.

You can also invest it in Mutual Funds, that offers minimum amount to start. Just make a thorough research, so you'll not be scammed.

I will not state the exact names and details of where I plan to invest starting with little amounts, but I might make a separate article for that.

6. Make an attainable budget, and stick to it.

This may be the hardest one, especially if you have been used to spending whatever you can just pull out from your wallet, or pocket. But, if you master it, it will be really fulfilling.

When you create a budget plan, make it realistic. Don't say that you'll just spend fifty bills for today when you normally consume a hundred. Budgeting will be useless if you can't follow it.

I personally observe the daily average expenses that I incur and add it up to a week's worth. I add some little amount as contingency fund and that's how I budget my weekly allowance.

You can also apply this principles in managing your income. Separate the bills for utilities, for rent, for car loans, and include savings in the budget, too! And whatever amount left, is the only available one for you to spend on your wants. (If you want to maximize the benefits, save it, too!)

7. Make it a habit

It is not easy to change your habits, I personally testify to that. I still find it hard to stick to my current budget, or I sometimes still give in to my favorite milk tea, (even I don't necessarily need it). But as long as progress is there, it's fine.

When you're able to make saving as a part of your life, you're gonna thank yourself in the future.

8. Be informed.

You should also do your part of having proper research about financial terms, how finance management works, and you may even engage in computations. This will give you a great edge in choosing how you'll save. The more knowledge, the better.

9. Do it now!

If you are looking for a sign to start saving, then this is it! Nothing matters more than willingness and time when it comes to saving. The earlier you start, the better the benefits you will enjoy in the future.

Take this as an example: Both Lucy and Elle saves the same amount every month. Five years later, they both decided to compute the accumulated savings they had, Elle's was higher. Why? Because she started earlier.

If I'd add the concept of interest here, you can even understand more the value of time. However, I will not, since this is supposed to be a general information for starters like us.

It's not yet too late to start.

If you've come this far, thank you so much! I hope you find these tips helpful. Just a quick disclaimer, though. These are just tips I based on my own experience and not to be taken as professional financial advice. If you want to take a formal education regarding financial literacy, the internet is just a click away.

Let's make proper use of technology. Utilize it in a way that may help you and other people as well. Information is everywhere, sometimes, we just ignore or don't see it.

Goodluck on our journey! Let's make every penny count!

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