Growing your wealth through a sustainable savings plan
A savings plan that will help you grow your wealth is what you need right now.
07:02 07 January 2014
The most logical way to save money is to spend less than what you earn. And because money begets money, the money you religiously save today until you reach your goal will have accumulated and compounded many times over.
The following steps can guide you to maximising your wealth accumulation through savings:
- Define your objectives: Determine what you are saving for – is it for a new home, a dream vacation, paying of a big debt, your children’s college education or a wedding.
- Take a stock of your current financial state: prepare a budget to know how much money is coming in, your regular payables, allotment for savings, and all expenditures.
- Set aside money for savings: analyse your spending habits and all your sources of income. See where you can cut your spending so it can be channelled to savings. See if there other opportunities for increasing your earnings and that you are passing it up unwittingly.
The most important rule could be spending your money wisely, opting for cheaper substitutes that will serve its purpose and not make you feel that you are depriving yourself of necessities. Buy only items that you really need and not because they are on sale or because you find it pretty.
Keeping tab of your progress will also go a long way in helping you achieve your objectives. It will be too easy to slip back to bad spending habits and “cheat” on the amount intended for savings. Knowing where you are at in terms of your financial goal will help you get back on track. If you are aware that you have overspent on some areas, you have to cut down your expenses for the other areas.
Smart Tip: If your ultimate goal for a project is £10,000, break down the amount into monthly targets to make your goal more realistic and achievable. Divide the amount into 12 to set your monthly savings goal.