There are so many reasons why we save. Some of us have a wedding to go to, some are preparing for their own business goals and others have their own reasons as well. Nonetheless, the reason for your saving is a very important part of the process.
According to LearnVest, we need to be able to answer important questions to ourselves if we want to succeed in our saving goals. So, what are the three main questions you should ask yourself before you get started with your financial resolution?
1. What Am I Saving For?
It’s the same as Simon Sinek’s popular quote: “Know your why.” Do you want to save for retirement? Is this for the future of your family? Are you saving because you want to check off your bucket lists?
Whatever it is, you need to be absolutely sure why you are saving. This will help you focus on saving when there are other distractions along the way.
There are instances when you would feel you’d have extra money to spend. But, without that strong determination and understanding on why you are saving, you can easily be swayed by the every sale you see on the market.
Knowing your why in saving helps you a lot.
2. How do I balance paying off debts and saving?
Almost all of us have outstanding debts, or else you wouldn’t be reading this article. So, if that is the case, how do you start saving while you’re still paying off your debt?
It’s a one-word answer: DISCIPLINE.
Billionaire and Shark Tank host Mark Cuban had to undergo more drastic measures when he was starting out. During his early years as an entrepreneur, Cuban said he never bought a car that’s worth more than $250. He had a strict rule on where his money is going to go and at that time, he knew it was not for him to splurge on parties or on vacations.
Cuban had ticked off the first question above and understood the long-term goal. The next thing he did was to apply it in his daily life.
Discipline is necessary for you to save successfully. If you are still paying off your debt, it’s either you focus on frugality and endure thriftiness for a certain period of time or you find another stream of income to supplement your needs. Either way, you have to know that these two alternatives would require a high level of discipline.
3. Should I keep them separately?
Keeping accounts separate has been a long-time practice of smart savers. However, it’s not common. Aside from it’s quite tedious to do, having separate savings and checking account might be challenging to manage. But, the key here is to have them in separate physical locations. Even though it might be tricky at first to have to manage two separate accounts, this actually keep things in perspective. You can clearly see what is happening to the savings account that’s supposed to be for your emergency use and you can see how the money is being spent on your debt-payments account.
Saving and paying off your debts can be a challenge, but once you stick on your end goal, this financial achievement can actually free up a lot in your life. You will have greater confidence in your money management skills and you’ll feel a sense of relief from being able to pay off your debts.
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