Taking a loan to meet a sudden expense is never an inviting proposition, less so when your credit report is not impressive because then your only option is a money lender. However, despite the negative impression of money lenders, a licensed money lender in Singapore is still a credible option.

That is why it is so important to cultivate the habit of saving. Contrary to what many believe, saving money is a habit, and is not always contingent to your monthly income. Of course, you are likely to save more if you earn more, but you can save a portion of your income if you try hard.

Usually, the toughest thing about saving money is getting started. In the beginning, figuring out simple ways to save money appears challenging. However, you don’t need to worry, because these tips will help you.

Record your expenses

You can’t save money, at least not on a consistent basis, if you don’t know how much you spend in a month. Therefore, first record all your expenses. Next, categorise your expenses, that is, so much so for grocery, so much so for petrol, etc.

Create a budget

Now that you know how much spend in one month create a workable budget. This means you should ensure your expenses measure up to the monthly income of yours. You can create a total monthly budget as well as a budget for each major expense category. For instance, you can decide to spend 85 percent of your monthly income and save the remaining. Furthermore, you can decide how much you will spend on different things, like 10 percent of income on grocery, 4 percent on petrol, 5 percent on entertainment, etc.

Know why you are saving money

When you take up an exercise regime or start following a particular diet, it is easier to stick to the new thing if you know why you are doing it. And that’s the case with saving money as well.

You should have short-term as well as long-term saving goals. Here are a few examples.

Short-term goals (1.5 – 3.5 years):

• Funds for emergency (4-10 months of monthly expenses)
• New car’s down payment
• Vacation

Long-term goals (3.5+ years):

• Education fund for your children
• Retirement
• Down payment on a new home

Pick your priorities

After you’ve taken stock of your expenses, created a budget, and listed your short-term and long-term goals, the next step is to prioritise. Prioritising goals will decide how you will save. You must not give into the temptation of picking a short-term goal, like a vacation, over a long-term one, like your retirement fund.

Avoid taking money out of a long-term fund

Let’s suppose you have a short-term financial emergency and you are unable to meet the expense even after emptying your contingency fund. If possible, borrow the remaining amount from a friend or family member rather than taking money out of a long-term fund.

If that’s not an option, you can consider approaching a licensed moneylender or your credit card company, However, make it a point, to cut your monthly expenses as much as possible to save more as soon as possible.