Now that everyone’s in the thick of sales and holiday shopping, I decided to look back to when I was younger and try to remember how hard it was to save. No, it’s not that I didn’t have any control of what I spent. As a matter of fact, it’s just the opposite. My family was so hard up that I had barely enough for home expenses and my daily expenses- to even save anything. And when I could, I would only see those savings gone in less than a week. Which makes me think: how about the young people nowadays who have good jobs and a self-sustaining family? Do they ever save money? Or do they even know how important it is to keep some money for the rainy day? Here’s my top five ways to save money when you’re young (and even when you’re not).
1. Make a budget and stick to it
Creating and sticking to a budget is one of the best ways you can save money. Making a budget doesn’t mean curtailing your freedom to spend the money you worked so hard for. By creating a budget, you’ll be able to see where your money is going each month and allocate funds to saving, bills and entertainment.
2.Always look for cheaper yet good quality alternatives
Earning your own can be very exciting–to the point that you feel like you can aspire and buy what you aspire for. But you should always avoid spending for something which you cannot afford in your young life. Look for cheaper alternatives which bring about close to par results. Like instead of eating in a high end Italian place, settle for something offered in a food court. Instead of a scent named after a famous celebrity, get one concocted by a humble brand. Believe me, it will take your savings further than you imagine.
3. Save one third of what you earn
If you aren’t sure how much you should save, U.S. News recommends saving one-third of your income if you can. By saving 1 peso out of every 3 pesos you earn, whether in a bank or a piggy bank, you would be better prepared for unforeseen expenses like a trip to the dentist or a surge in electric bills at home (you also have to pitch your share around the house, don’t you?) Also, if you do get blessed by a raise at some point in your career, keep in mind that you don’t have to spend the raise to upgrade your phone thru a new plan or factor in moving to a better apartment. Otherwise, you just turn your raise into an added expense.
4. Start an emergency fund
Another good way to save for financial hardship is to start an emergency fund. Investopedia recommends putting some money into a high-interest savings account, or money market account.
5. Pay off your debt
While putting money into savings is a good way to prepare for your future, you should also be concerned about paying off your debt. That includes credit card debt. So if you are the type who can’t control your spending and easily get enticed with trends and bargains, then don’t get a credit card. It will only be a problem for you later on.
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