Saving For A Rainy Day
Top Tips To Stop Spending & Start Saving
We can all agree that times are tough, and the idea of saving money has become less and less of a reality these days.
Many people are using credit just to buy food (that’s when you know you are in serious trouble). We all know we should be saving, but it seems unrealistic.
If you have recently changed your lifestyle, and entered into debt review, you will be feeling a lot less stressed about your debt. But you might remember that your Debt Counsellor advised saving when they helped you with your budget. This is because they know that you need to make some provision for the unexpected.
So, how can you effectively cut costs and start putting something one side, each month, towards a rainy day?
Here are some examples on how you can save on your expenses each month or could help you to boost that zero balance in your savings account to something decent.
The Envelope Method
The Envelope Method is a way to visually (and physically) work within your budget.
It involves putting physical cash into envelopes labelled for different expenses, such as rent, groceries, entertainment, etc.
Once you’ve spent all the cash in a particular envelope, you can’t spend any more in that category, until the next month.
This method helps you stay on track with your spending, and encourages you to be more mindful of your expenses. It allows you to allocate a specific amount of cash for discretionary spending (things like snacks and fun) and helps you slow down and consider what you really need.
Read More about the Envelope Method HERE:
https://debtfreedigi.co.za/saving-techniques-the-envelope-method/
Automatic Saving
Why not set up an automatic transfer of a portion of your income into a separate savings account (or pocket) before you have a chance to spend it?
This can be done through your bank’s online banking or mobile app.
By automating your savings each month, before you even start to spend, you can ensure that at least a small portion of your income has gone directly towards savings, without you having to think about it. This makes it easier to consistently save, the amount can be small but it gives you something to build on.
Just Don’t Spend
It goes without saying that not spending, is an effective way to cut costs.
Obviously, you need to spend on essentials, but the No Spend Challenge is a hard core approach to our spending habits, especially on non-essential items like snacks, toys, or gadgets. By committing to a period of time without spending money on unnecessary purchases, you can reset your spending habits and save money for more important things. During the challenge, you focus on using what you already have, and will definitely be more mindful of your spending.
‘During the challenge, you focus on using what you already have’
You decide if it is one day, a week, or 4 days a month or…well, you decide.
The No Spend Challenge encourages you to be creative with how you use your resources, such as repurposing items or borrowing from friends and family. It’s a valuable lesson in distinguishing between your real needs and wants. It can also help you realize that you can still do fun things but makes you find free or low-cost alternatives, such as having a picnic in the park or borrowing a video game from a friend.
By prioritizing your needs over wants, you can start to see free ways to do things rather than always spending and spending. And you will save some money along the way.
Read More About the No Spend Challenge HERE:
https://debtfreedigi.co.za/saving-techniques-the-no-spend-challenge/
Make A List
Shopping is a necessary part of life, but it can easily break our budget if we’re not careful.
To stay on budget, a simple shopping list can be incredibly helpful. A list acts as a plan, whether you’re shopping in-store or online. By jotting down the things you really need, you can stay organized and avoid impulsive purchases.
Impulse buying is a common pitfall while shopping, with stores strategically placing small, quick-to-grab items like chocolates or snacks near essential items such as bread, milk, or meat to entice shoppers. These traps can lead to unnecessary spending.
Having a shopping list, whether it’s on your phone or written on paper, can help you stay focused and resist these temptations. It acts as a roadmap for your shopping trip, allowing you to prioritize and purchase only what you really need, helping you save money in the process.
Read More About Savings Lists HERE:
https://debtfreedigi.co.za/savings-tip-the-value-of-a-shopping-list/
Think About It
The next tip is all about time. The 30 day rule and the 24 hour rule are powerful strategies that can help you make smarter financial decisions.
The 30 day rule encourages you to wait for 30 days before making any non-essential purchase, allowing you to really think about whether it’s a necessity or an impulse buy.
The much faster, and slightly more popular, 24 hour rule is where you hold off for 24 hours after feeling the urge to buy something, giving you time to reconsider and avoid impulsive purchases.
Obviously, 24 hours may seem easier to manage than 30 days. But guess which cuts down on spending the most?
‘both habits promote mindfulness and conscious spending’
Still, both habits promote mindfulness and conscious spending habits, helping you save money and avoid unnecessary expenses or impulse purchases.
Read More About the 30 Day and 24 Hour Rule here:
52 Weeks of Saving
The 52 week Challenge is another effective approach to building your savings.
The challenge involves saving a specific amount of money each week for 52 weeks, typically starting with a small amount like R10 and gradually increasing it over time.
You could increase the amount by R10 each week. So, week 2 you would save R20, week 3 you would save R30 etc. By the end of the challenge, you will have accumulated a rather significant sum of money. And that money can be used for emergencies, investments, or even a holiday, which you probably need.
The 52 week challenge is a simple yet effective way to develop a savings habit and improve your financial well-being.
Read More About the 52 Week Challenge and find out how much you could save here:
https://debtfreedigi.co.za/saving-techniques-the-52-week-challenge/
Save Something!
Saving is hard, everything is getting pricier and we are all feeling the pinch. And those rainy days we should be saving for, are becoming all the more common these days.
So, it is vital to have something in place for when the unexpected strikes.
Using any one or more of the above savings techniques such as the 30 Day Rule, 24 Hour Rule, Envelope Method, 52 week challenge can help you save money and make more intentional spending decisions.
You don’t have to be saving unrealistic amounts each month, but you should force yourself to save something. Save towards those new tyres your car will need, or those school clothes for next year, but save something.
‘find a technique or techniques that work best for you and your family’
It’s important to give it a go, and find a technique or techniques that work best for you and your family. Then try to stick to your plans, slowly building up your savings, trust us, you will be happy you did.
Note: To read the rest of this issue of Debtfree magazine click next/previous
