WITH life flying by and the cost of living making it harder to go on holiday, listed below are easy tips to save money to make those dream vacations become a reality.
• Build an emergency fund. Put some money aside on each pay day.
• Establish your budget. On the first day of a new month, get a receipt for everything you purchase.
Stack the receipts into categories such as restaurants, groceries and personal care. At the end of the month you will be able to clearly see where your money is going.
• Budget with cash and envelopes. If you have trouble with overspending, try the envelope budget system where you use a set amount of cash for most spending.
• Don’t just save money, save! There’s a difference between saving money and saving money for your future. So don’t just spend less, put the money you save into a savings account to plan for education expenses, retirement, or emergencies.
• Save automatically. Setting up automatic savings is the easiest and most effective way to save, and it puts extra cash out of sight and out of mind.
• Aim for short-term savings goals. Have a goal such as setting aside R200 a week or month, rather than a longer term savings goal.
• Start saving for your retirement as early as possible. It’s the miracle of compound interest, or earning interest on your interest over many years, that builds wealth. Because time is on their side, the youngest workers are in the best position to save for retirement.
• Save your windfalls and tax refunds. Every time you receive a windfall, such a work bonus, inheritance, contest winnings or tax refund, put a portion into your savings account.
• Save your loose change. Putting aside just 50 cents over a year adds up.
• Use the 24-hour rule. This rule helps avoid purchasing expensive or unnecessary items on impulse.
Think over each non-essential purchase for at least 24 hours. This is particularly easy to do while shopping online, because you can add items to your cart or wish list and come back to them a day later.
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