Beginner's Journey: Savings
Updated: Jul 30, 2020
Not enough to save?
Often, one may attribute a lack of saving to insufficient allowance in the first place. But this may not be true- are you just simply spending too much unnecessarily? Savings is linked to expenses and it is important to keep track of our expenses. Check out our article with regards to tracking expenses here. By tracking your expenses, you can take into perspective exactly where and how much you are spending. This way, you can easily start to save more.
Importance of saving
Often we hear our parents telling us to save, however, we tend to take their advice with a pinch of salt. But how important is putting money aside exactly?
Saving is important to understand the value of money; to be able to afford something in the future, and to ensure that one will have a backup plan if any emergency happens. Saving also gives us options to pursue what we may not have considered. Take for example, a concert with your friends- without prior savings, how will you be sure that you will have sufficient funds for the concert? Are you going to risk not going because you were too lazy to start saving earlier? There are always the perks of saving early and you can never have enough saved. When you save money, the reasons will come after.
As mentioned in our budgeting article, saving needs to be taken into account and can occupy a significant portion of our finances.
What are some of the best ways to save for kids?
Here are some tips!
Okay, so you are now going to start saving. How much percent should you save? How do you set a goal which is realistic and be motivated to work towards? The key is to set a SMART goal.
What is a SMART goal? It is an effective way of guiding goal setting and ensuring that the goal setter has a clear focus and continued motivation with regards to his/ her goal pursuit.
SMART goals are
Specific: Meaning that it is well defined and unambiguous. Try using the 5W1H (Who, What, Where, When, Why and How) to better define your goal to be more specific and less vague. Instead of ‘I want to save money’, make it clearer, such as ‘I want to save $10 from my allowances every week'.
Measurable: You will need some form of guide to determine your progress and know if you are on track. Look for indicators of progress when doing goal setting, and set numeric goals such as 20% of my allowance. For example, 'I will set a goal of saving $100'.
Achievable: Access your current situation and make sure that your goal is attainable. You need to be realistic with yourself. Not to say that your goal should be easily achievable. Instead, your goal should be one that pushes and stretches your abilities, but still remains possible. Ask yourself questions pertaining to whether you have the necessary resources, commitment and time to achieve your goal.
Realistic: It is important to match your goals to your needs and whether you think it will be worthwhile. Take the time to think about why you are setting the goal, about whether it is relevant to your beliefs and pursuits. If not, consider how you can adjust the initial goal.
Time based: Set a start and end date with regards to your goal, as without which, there will be a lack of urgency or motivation to complete the goal. This can be short term (eg. 1 month) or long term (eg. 1 year).
In pursuit of your goals, remember to celebrate the small wins. Do not be too hard on yourself should you fail in the beginning; you can always start again the next day. Remember, a habit takes time to cultivate, so be patient.
Easy ways to save
Saving does not need to be difficult, here are some additional tips to get you started:
Make saving a habit and start small.
Start with a small goal and do not be too eager to rush into a large one, as this can often be daunting and may undermine your motivations. An example of a small goal can be to perhaps save every dollar coin you have with you. Start a dollar jar and revisit it frequently, putting in every dollar coin you have in your wallet. Overtime, you’ll start to form this habit, and can then further expand your dollar jar to include other small changes or even notes.
2. Use your student ID.
Student discounts are everywhere and why not utilise and maximise its discounts whilst you can? Keep your eyes peeled for such discounts and ask to double check or if you are unsure. Over time, the discounts will add up and you will be able to cut down expenses on areas in which you are able to use your student discounts, giving you more money to channel into your savings.
3. Start a savings account
Consider setting up a kids savings account to enjoy greater perks and maximise the value of your savings. If you have not set up one yet, talk to your parents about it. Having a savings account has its advantages such as:
Deterring you from spending your savings recklessly as now you will have to go to the ATM machine to withdraw money to spend
Giving you extra security and preventing your savings from getting stolen
Allowing you to earn interests from your savings, which can amount to a significant value as time goes by
So get saving and take greater charge of your finances. It is crucial that you start saving so as to be open to more possibilities in the future. If you have any questions, do feel free to drop us an email and we will try our best to answer them!