How much do you save in a year? Never calculated? Then it is high time that you calculate your earnings and analyze your expenses. You see life never goes as you predicted. Sometimes it gives you sweet surprises, sometimes shock jolts that slap you back to reality. But no matter what unexpected situations fall in your lap you should be mentally prepared to handle them. Although you don’t know about troubles until they knock on your door. But there are types of troubles that you can control if you’re cautious enough. Money troubles. You see any health-related issues or sudden urgency for money always come unannounced so you must be prepared for such troubles. Wondering how? Savings, yup you heard it right. Saving money actually helps you when you’re high in need of money.
Having at least $1000 saved in your account will give you the peace and power to handle money-related adversities. Whenever catastrophe struck you will not be in a panic, at least your savings will become your safety net.
So no matter what your profession is, it is quite important for you to start saving at least $1000 a year. You see there are many people who are interested in saving money but the problem is they don’t know where to take the first step. And this is the reason why many don’t have any savings. Don’t wait anymore, start an emergency fund that will help you in case of any emergencies.
Start with “Why”
Before you embark on your journey to save $1000, you must first ask yourself why. You see if you don’t have a motivation or a goal that you want to reach after a few months you will lose the enthusiasm and vigor to continue. So it is important to establish why you want to do this. Instead of motivating yourself with fear that unannounced emergencies bring, you can use positive motivation like you can buy anything you want or your children’s future or buying a property.
See you have to set your priorities right and having a clear goal will help you in seeing why it is important to start the emergency fund. So having a set goal will help you in putting your savings first. At the same time don’t be fixated on having a positive reason for saving money. You see not everyone needs a reason to save money right? It is not a bad thing so why think so much. So whatever the reason is it is ok just get it clear before you start saving.
Track your finances
Before anything else, the first and foremost step is to check your financial health. Simply put, track your income and expenses. Yup, you heard it right. If you regularly have a habit of analyzing your expenses and income then it is good, this is not something out of ordinary for you. However, if your not someone who actually has never kept track of your expenses then you must take this as an opportunity to start.
You see if you are new to this then you must at least track your expenses for six months to understand your spending patterns. You see most of the time people end up sending more than they earn and they do it unconsciously. So trying to find it out will be a bit difficult to understand and accept. Once you find all the ways you’re spending wrong you can take corrective measures to correct them. So first bring your financials in control and then you can start saving money.
Set a time period
Without a set time period your goal will take forever for you to reach your goal. don’t you agree? Yup this is the reason why there is a time frame for everything. It is to see the progress of your efforts step by step and achieve them. So set a set time period and for you to achieve it make sure that your goals are achievable. As you see another important point here is that your goals should be realistic and this applies for the time period you set too. To be more specific set a particular date. See by this particular date this will be the amount you will save or by this month this will be my savings. It’s a pretty good way to motivate yourself whenever you reach a milestone you will be more and more pumped up to reach the next.
Determine the money you could save
If you’re someone living from paycheck to paycheck you better have a plan before you start saving. Once you analyze your finances you clearly know that your spending patterns make it easier to determine the amount you could save. If you have only a single paycheck then it can get quite hard to save up a good amount of money. But however, if you have multiple income streams then take the time and come up with a feasible plan that will help you in saving money. Once all the expenses for the month are cleared, what is the amount of money that you will have and what percent of that money are you willing to save? So first ask yourself these questions and once you have answers you can save that same number every month to reach your goal.
Don’t save all eggs in one basket
Probably you must have seen people referencing this statement for investments. But this statement fits the bill for this situation too. See if you save all your eggs in one basket when the basket falls not even one of your eggs can be saved. The same goes for your money. If you put all your money into one account you will end up sending all the sum without looking back. If you have self-control then it is great. But what if you don’t? If you want to save money first you must start by changing your habits of spending.
So in that process, you must make some strict decisions. These savings are your emergency funds and it is clear that they should be used in case of emergencies only. So make sure you save all your money in a separate bank account that you don’t use for paying bills. This way there are possibilities that as you’re not used to using this bank account you will not be tempted to use this account.
These are simple tips that will help you in saving $1000 in a year. Also, you can take up extra jobs to save more money. Because there are many side hustles that will bring in good cash for minimum effort. See once your income increases your saving will also increase. You will be easily able to save $1000 a year. So what are you waiting for? Start on your journey now.