When it comes to saving money, a lot of us have no idea on how to start, or even why it is even important in the first place.
Saving is one of the most important steps to creating wealth as taught by Amana Capital in the 7 Steps to Wealth online Course.
The ultimate goal of saving money typically comes down to one important thing: Financial Independence.
When you start saving, it’s important to have a plan to make sure you’re prioritizing certain goals and to make sure you’re adequately prepared for each of them.
So, to help you get your savings on the right track, we’ve rounded up some mistakes that are most commonly done by new savers and tips to help you avoid them.
Not making it automatic
While making the decision to save is easy, starting it and actively doing it is one major problem that most savers encounter.
The best savers know not to rely on willpower, especially when you’re just starting to save.
That is why we always recommend that you automate your saving culture. What this means is that money comes out of your paycheck before you have a chance to spend it.
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The easiest way is setting up a savings accounts and then set it up in a way so that a specific amount comes out of your paycheck and goes directly into the account.
After just a few months, you’ll be able to see your savings really start to grow!
Using your head instead of an app
Sometimes, we have a lot going on in our lives and saving will be the last thing on our mind.
So, if you haven’t automated your savings plans, then its easier to use an app or a website to help you in tracking your savings and also to remind you to save.
Using Credit Rather than Cash
Studies have shown time after time that people use credit cards usually spend 12 to 18 percent more than when they use cash.
If you are just starting out to save, you have to learn to shop with cash so that, one, you won’t use credit and risk getting into debt, and two, you’ll protect yourself from impulse buying.
Having Expensive Hobbies
Some people have very expensive hobbies and at the end of the day, some of these hobbies may not have any value they add into the lives of these people.
One thing that new savers need to avoid is their expensive hobbies.
You can do this by reconsidering your hobbies, sports, and recreational activities to see if there are cheaper ways of doing the same thing.
Saving Without a Goal
This is very important. For you to start saving, you need to have a goal for your savings. For example, you can start saving up for a master’s degree, a vacation, to buy a new house, a car and so on.
This is because having a clear goal for your savings will make you less likely to tap into those accounts when you’re feeling a pinch and more likely to take your savings seriously.
Not having a goal for your savings makes it more difficult for you to put money aside. After all, if that money doesn’t have a clear purpose, you might wonder what’s the point in saving it?
To help you in your savings journey, Amana Capital is giving a free online course called the 7 Steps to Wealth for Kenyans who are interested in creating wealth in the long run.
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