How to create a financial buffer without feeling cheap.
Day 1
1. Look at my monthly incomes and expenses.
What do you spend your money on? If you rarely use cash, you can find out very simply just by checking your transactions from the past month - how much did you really spend on take-away, bar hopping or clothes? If you prefer cash, you should make a record of everything you buy e.g. in your phone and/or save all your receipts for a month. The point is for you to understand what you generally spend your money on.
Day 2
2. Decide how much I want to save each month.
*between 5-15% is good
After properly reviewing your expenses, it’s easier to decide what expenses you are going to cut back on. For many it’s the snacks, drinks, restaurant lunches or take away coffee. For others, it’s the clothes, online casinos, interior items, luxury gadgets or costs for services you could do yourself, e.g. clean the car or iron your shirts. Where do you have your potential savings?
Day 3
3. Set up a savings account
If you have a connected bank application on your smartphone you can probably set up an account inside the app. Otherwise, contact your bank and ask them to set up a savings account for you. It’s usually an appreciated task.
Day 4
4. Create an automated monthly transfer of a specific amount to the saving account.
Set an automatic transfer from your checking account to your savings account. It’s a smooth way to save money, since you don’t have to occupy yourself with making the actual transfer. Preferably set the transfer to the same day or the day after you get your pay. This way you will be blissfully unaware of how much less you can spend each month, all the while your money stack grows
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