Save to be rich
Do you find it hard to save money and that even if you have tried, the figure in your bank account always remains stagnant? Saving money is the foundation of personal financial planning. Even if you are a capable high salaried personnel, you can end up poor with extravagant spending. Thus, I hope the following tips can help you to save money.
Value money. As simple as it is, you need to value money so that you will think thrice before parting with it. Protect it at all cost and do not let others take away your hard earned money easily. Once you have the correct mindset that money is valuable, you are ready to start saving.
Pay yourself first – Rich Dad’s popular phrase. Most people tend to do otherwise; they would spend first and thereafter, save the remaining. Chances are, there is nothing left. Thus, set a target to save each time you get your paycheck. “The Richest Man in Babylon” advises you to save no less than 10% of your salary. You can open another bank account specially for savings where you channel that 10% every month religiously. Do not touch the money in this account unless it is an emergency. If you think that you do not have the discipline, you can sign up for regular savings plan with your local banks who would automatically channel your money to another account. In Singapore, here are some of the options:
- MySavings account (POSB)
- FlexiDeposit (UOB)
- Monthly Savings Account (OCBC)
Live below your means. This is a classic answer to “how to be rich”. Buy things that you can afford, especially the big ticket items. You may adore the convertible sports coupe or the penthouse in the prime location, but seriously ask yourself whether you can afford it comfortably without a big loan. Do not end up in huge debts that you are not able to pay, not to even mention you will not have the capacity to save.
Set a budget. After you set aside 10% of your paycheck for savings, plan a budget of the remainder for regular expenditure like your bills, transport, food and most importantly, leave some for your entertainment and recreation. Everyone needs to enjoy but set a budget and make sure you keep to the amount. In this way, you will be able to control your expenses. Remember: If you fail to plan, you plan to fail. Track your expenditure monthly to make sure your budget is realistic and if it is, whether you kept to it. It would be easier to track if you make transactions with your bank card or credit card as the bank will send you the transaction records each month. However, be careful with credit cards, do not spend more than your planned budget or above your means. One advantage of credit cards is that you can save some money through the discounts at merchant outlets.
When you are able to do the above, I am sure you will feel more secure – and definitely a less stressed person is a happier person.
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