Building a financial cushion
A large number of people that struggle with money issues often find themselves running out part-way through the month, and many of those that have no savings in their accounts have had experiences where emergency payments or inattentive spending habits have left them scraping by and waiting for the next paycheck. Before considering anything else with regards to saving, it’s important to get yourself into a positive savings mindset, and have enough funds kept back each month to stop you from worrying or getting into any negative predicaments. Allocating a certain amount to save each month, no matter how big or small, will ensure that you have some funding to fall back on should some emergency bumps in the road occur.
High Yield Savings accounts can be a great way of building up a financial foundation relatively quickly, if wanting to make a larger investment, or put money down for something like a deposit on a house etc. However, savings accounts have taken a dive in their rates in recent years, meaning they are not as lucrative or purposeful anymore. This is certainly true of long-term accounts; which experts suggest not even bothering with.
Preparing for your future
Once you’ve got yourself partly financially stable, and are comfortable juggling your monthly outgoings while having reserves available to deal with surprise payments; having some long-term savings plans on the backburner is a great way of setting yourself up for later life. This will give you peace of mind as you plan for the future.
If you have a significant amount of capital and want something to invest it into rather than allowing it to sit there and gather dust, property investment is another secure investment strategy. Property is a tangible asset that if chosen correctly can grow and sprout into something extremely valuable in years to come.
Getting yourself afloat financially can often at times feel like a monolith task, and it isn’t something that can necessarily be done overnight. Here are some quickfire tips and tricks that you could try, and might already be trying, to chip away at making savings:
- An Envelope system is a strategy that involves taking a certain amount of money out of your account each month and putting it into different envelopes for your major outgoings, monitoring each one and not allowing yourself to go over. This is a bit archaic and pointless in the modern day, and there’s probably a more efficient way you can monitor different spending. Perhaps through an app or banking programme on your phone? Despite this, the premise is still a good one.
- Cutting down on impulse purchases is one that might seem trivial, but it’s important. Think about what you genuinely need to buy, and what might be a waste of your hard-earned cash. That’s not to say that you can’t have fun with your money when you get paid, but a heightened awareness of the value of different items can do nothing but help your residual bank balance over time.
- Scheduling your outgoing payments to go out on the same day as payday is a great organisational tactic, as it will help you to see how much you have to spend and also protect you from surprise charges in the middle of the month if you’re struggling. If it seems like a lot, see what you can cut down or stop entirely.