How to encourage your savings habit?

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How to encourage your savings habit?

No matter how much you earn, you may still struggle with your personal finances. Without a healthy money habit, even the affluent can land in financial emergencies  frequently. While borrowing from licensed money lenders is a proven way out, it would be wise to prevent any cash crunch situation in the first place. You can simply start by opening a savings account. However, that is only the first step. There are many other ways to encourage your savings habit. Here’s a look.

Change your mindset

For things to change, you have to change the way you think. If you think your monthly salary is too small to allow you save, you are not alone. Even your boss, who perhaps earns double the amount you earn, thinks the same way. The problem is; people usually spend first and save the rest. You need to reverse the habit. You should first keep an amount aside from your monthly salary for savings and then live your life with the rest amount. Of course, this is difficult, but nothing comes easy. If you are all set to change your savings habit for the better, try to change your mindset!

Set an objective

You know you have to save for the future, but you don’t have any set goal. That is one of the most common issues holding many people back from developing a healthy savings habit. You need to set small, achievable goals so that you can keep yourself motivated. For instance, you may want to save some amount every month for buying a car within three years. Set a timeline and calculate how much you need to save monthly to achieve your goal. Or, you can keep aside a certain amount for building your emergency fund within 12 months. Try not to use your savings in the event of a sudden financial crisis. Alternatively, you can borrow from licensed moneylenders in Singapore. Have a separate plan for repaying the loan. It should not hamper your ongoing savings.

Automate your bank account

You may be tempted to skip saving for one month, but your automated bank account will not. It is always a good idea to have your bank accounts keep aside a certain amount every month automatically. Automating helps to keep the pressure on you and thus prevent you from indulging in not-so-important spending. For instance, you can automate your salary account to transfer an amount to your savings account every month.

Reward yourself

You need to enjoy what you are doing. Saving money does not mean you have to live a dull, boring life. Set small milestones and reward yourself every time you reach a milestone. For instance, once you achieve one milestone, you can plan a family vacation.

Watch your spending

One way to start saving money is by keeping a watch on your spending. Keep a record of every small purchases and subscriptions. Now review your balance sheet every few weeks to look for any opportunity to kerb your spending. You can set strict spending rules for yourself. For instance, you may decide not to spend more than $100 for a pair of shoes, or not more than $30 for hair styling.