You are not managing to save. Ever wonder why? We provide you with 5 reasons why you are not managing to save.
Having a monthly budget lets you see exactly where your money is going and not having one puts you at a serious disadvantage when you’re trying to save money. You may plan to set something aside but what inevitably happens is you wind up at the end of the month with no extra cash to spare. Making a budget gives you control over every Euro so your savings does not come up short.
Having a specific goal or target you are trying to reach helps you to stay focused on what it is you are trying to achieve. If you do not have a goal in mind, of how much you want to save or what you want to use the money for it is easy to let other things take priority. Take some time to think about what your goals are and what you are willing to sacrifice to achieve them. The more specific you are about what you want to do the easier it is to create a plan for getting there.
Life happens and everyone experiences their share of financial setbacks at some point. The car breaks down or the refrigerator goes out and suddenly you have to cover an extra expense of several hundred or even several thousand Euros. The money that you were planning to put in your savings account suddenly is swallowed up by something else or worse, you end up charging it to a credit card. Building a small rainy day fund before you get started with your other savings goals means you will not be derailed if something pops up out of the blue. Even if it is just a few hundred Euros, having that extra money on hand can make a huge difference to your bottom line.
The faster you get rid of your debt, the more money you will free up to put into savings but you will need a plan for paying it off. One way to get rid of debt is to pay down the smallest balances first and snowball your payments over time. Another is to tackle the debts with the highest interest rates first since those are the ones that are costing you the most money. You may wish to look at our post titled ‘Paying off your debt’ by clicking here and download the GEMMA Getting out of Debt Calculator.
Select your debt payment strategy and be sure you stick with it for the long haul.
It is easy to make excuses about why you cannot save money. My parents never taught me about money. I am just no good with numbers. I do not make enough to save money. These are just a few of the mental roadblocks you might be putting in the way of your path to saving. Changing how you view money may not happen overnight but the more work you’re willing to put into it the bigger the pay off will be Even if you start small, you’re building the foundation for a solid financial future.