Ask Away Blog: Saving Money When You are Bad with Money

Saving Money When You are Bad with Money

Tuesday, November 27, 2018

 Some people are great with money. They always were. They put themselves through school without ever borrowing money. They got a job as soon as they were able. They put some aside each week for a rainy day. They’ve always had savings, and they’ve never needed to borrow. These people never spend more than they can afford to and they always make sensible and well thought out financial decisions.

Unfortunately, we’re not all like this. Especially when we are young. Credit is offered as soon as we are old enough to take it and it’s all too tempting to accept. We spend more than we earn on things that make us happy and we soon find that we are in debt. Repaying these debts can mean that we’ve never got any spare cash, we struggle to afford day to day expenses, and money is always tight. There’s no chance to save, and when there is, we’re so used to our financial situation that we don’t save it. We spend it, enjoying the little extra in our pockets for a change.

But, saving is crucial. If you never save any money, you’ll never be able to pay your debts off. You’ll never be able to afford large luxuries like holidays, and even without these, at some point, you’ll want to start putting some money aside so that you can retire in comfort. Here’s a look at how you can save money, even if you have always been a spender.



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Change Your Mindset

If you’ve spent a long time with debts, it’s probably just become a way of life. Something that you never give much thought to. Sit down and look at what you owe. Work out what you are paying each month in interest — times that by 12 for a year. Then by 20, which is perhaps how long you’ll have that level of debt without paying it off. Which you will have if you keep spending.

This can help you to realize just how much your debts are costing you. It’s sure to be a lot more than you think and taking ownership of this information is often enough to change your mindset and your attitude towards money.

Invest it

If you are bad with money and always spend whatever you’ve got, investing can be a great option. Almost like you are hiding your money from yourself, while also letting it work to make you more money. If you’ve never invested before, read ‘https://budgetboost.co/betterment-vs-wealthfront-vs-vanguard-review/’ for some help on how to get started.

Set Yourself a Goal and Set up a Direct Debit

Ask yourself how much you want to save in the next year. Give yourself a goal. Then, divide that by 52 to see how much you’d need to save per week to hit your target. Compare this with your budget to make sure it’s a realistic target and reduce it if not.

Now, set up a direct debit to automatically transfer this amount into a separate savings account each week. Even if it’s only a small amount of money, it’s saving, and it will soon start to add up. Read more about savings accounts here, https://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001/.

Enjoy it

Let yourself feel good about your savings. Even a small amount is you working to make a positive change to your life. Enjoy watching your small savings pot grow.




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1 comment:

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