Many people realise the importance of saving for retirement, but they battle to find the balance between enjoying their hard-earned money and making provisions for the future. We explore some tips on saving while spending.
1. Know your spending patterns
The first step to a successful savings plan is to understand how you spend money, reports TIME.com. Know exactly how much money goes in and out of your home every month or – better yet – every week. This way, you will be able to establish a spending pattern and find out if you have “room to breathe”.
What you give up now, might lead to a bigger reward later. What are you willing to give up now in order to reap the rewards in a few years? Start small if you have to. If you buy a cup of coffee for R20 every day, you’re spending roughly R600 a month. You could put this money towards an investment.
3. Just because you can?
It is important to limit your monthly bills as far as possible, says Eric Kies on TIME.com. “While buying a new car may not seem like a big deal if you think you can afford it, adding on a car loan to your [expenses] comes with a major trade-off: it limits your day-to-day spending.”
4. Don’t touch
If you’re serious about setting money aside for the future, set up an account specifically for your savings. A debit order into this is also a good idea. That way, you won’t have the money to spend straight away. This will give you a better idea of what you can spend from your day-to-day account.
5. A little something
It might be easier said than done, but plan for the unplanned. Once in a while, be spontaneous, but make sure you can afford to do so. Over and above your automated savings, keep a little something aside to spoil yourself. A bit of planning can go a long way. Strike the balance just right, and you’ll have savings for retirement as well as spending money to do the things you love!
This article should not be construed as financial advice and is provided for information purposes only.