Today I am excited to introduce Patricia Sanders, who wrote the following guest article for 100 Steps Mission:
You can’t be financially independent if there is not enough money in your savings account. Job is not a piece of cake and you won’t get a pay hike several times in a year. A new job can give you a better package but this doesn’t necessarily mean your savings will improve. There are lots of factors to consider. For example, suppose you have to relocate for this new job, which means extra expenses. Unless the paycheck is very high, your savings won’t increase.
When you think about taking up a new job, you should research on the employee benefits minutely. What kind of benefits can you get from the new company? Will you get health insurance benefits, life insurance benefits, and transportation reimbursement? The less you have to spend on these, the more money you can save.
Let’s us discuss the other possible ways to multiply your savings because you can’t be financially independent otherwise.
How to jump-start your savings
You can’t retain your financial independence without improving your savings. You’ll always be dependent on someone for covering your expenses if there isn’t sufficient money in your bank account. If you’re a student, you’ll depend on your parents. If you’re working and don’t have enough savings, you’ll be dependent on credit cards for taking care of your emergency expenses. Recurrent fights over money issues will occur between you and your spouse.
- Avoid using credit cards excessively: Instant gratification is not good for your financial health in the long run. You can purchase anything you love with credit cards. But think carefully. If you can’t pay credit card bills later, then you’ll be in debt. Try to pay your bills in cash so that you don’t have to pay additional interest.
- Cut down your expenses: Make a list of your monthly expenses and find out how much you’re spending every month. Pick that one expense you can avoid every month. For instance, you can have a cup of tea in your home instead of buying it from outside. Cook a healthy meal at home and have it in your lunch. You’ll save minimum $600 every month. You can use this money to increase your savings.
- Love and follow your budget: Your monthly budget helps you track your income and expenses. Don’t ignore it. Make it your goal to stick to our budget every month. Set an amount you have to save every month. Suppose, you decide to save $800 every month. In that case, cut down on any expense that stops you from reaching your saving goal.Don’t cover extra expenses from your savings. You’ll need the fund for your rainy days.
- Create an automatic savings account: Do you lack the discipline to save money? It’s quite easy to forget about saving money when there are so many lucrative ways to spend money. The best way to improve your savings is to automate your savings.
How can you do that?
It’s simple. Get a percentage of your paycheck deducted automatically every month and deposit it into your retirement or savings account.
The best part of an automatic savings account is that you don’t need to remember yourself about depositing a specific amount into the account every month. You can save consistently. You’re not losing money. Rather, this money is increasing your savings gradually.
- Stop impulsive shopping: Create your shopping list and stick to it. Don’t make irrational decisions when you’re shopping. Don’t get lured by the attractive deals. Don’t purchase things unnecessarily. You’ll see lots of items in the sore. But do you really need everything? Think carefully. Why should you waste your hard-earned money on something that looks good but is not useful?
One of the primary steps you need to take for attaining financial independence is to increase your savings. It doesn’t matter how much you can save. The important thing is that you can save some amount every month. It’s a habit. When you eliminate extra expenses and lead a frugal life, your savings increase automatically. Just don’t misuse the money you save, You can use it to make a down payment on your new house or can use it to help your child cover his/her tuition fees.
Patricia Sanders is a financial writer and a blogger as well. She has been associated with DebtConsolidationCare for a long time. She writes regularly on her personal blog yourcardinalpoint.com on a variety of topics and she also contributes her valuable posts to different financial communities, blogs and websites too. You can also check out her social media profiles on Facebook and Twitter for more information.