It is always a good idea to consider building up some savings in case of any emergencies. Unfortunately, all too often the hardest part about saving can be knowing where to start. If you want to understand where your money goes so that you can take that first step towards starting a savings account, then it can be a good idea to keep track of your smaller outgoings first. As the old saying goes “Take care of the pennies and the pounds will take care of themselves”.
Record your little purchases
You might not realise it, but those small purchases that you make can really add up, and quickly. The problem is that unless you actually keep a record of them you really won’t see just how much you are actually spending until the end of the month when there is no money left in your account, and then you end up wondering where it has all gone. If you head to the store midweek for a few groceries take a list so that you only buy the things you need; otherwise, you will probably find yourself buying a few extra things. Those cans of fizzy drink or bottles of water when you go out for the day can cost a lot. Write them down and you are likely to be shocked by how much one or two drinks soon adds up to.
Unfortunately, it isn’t until we see those small purchases written down and see just how much they actually add up to that we realise just how much money we are spending needlessly. Identifying where we are spending too much is a great place to start when looking to build up some savings for the future.
Learn to budget
Once you see just how much money you are spending on all these extra little purchases it is easier to make adjustments that will help you save. Create a budget for yourself and try to stick to it – remember sometimes necessary expenses can come up so you may need to adjust your budget accordingly. If you go out for the day, take drinks and snacks with you. This will be significantly cheaper tha buying whilst out and you will soon see the saving.
Have a savings account
If you follow a budget and have money left at the end of a month it can be a good idea to move it to a separate savings account. This makes it harder to spend it on all those small items and will, of course, really start to add up over time.
Some people like to withdraw their grocery money in the form of cash each week. This is a great way of keeping track of the small spends – you can see the money going down, unlike when it is in your bank account and you pay with a card. At the end of every week transfer left over money to your savings account.