Avoid making a drastic lifestyle change in savings


Time is of essence in financial planning. The earlier you start planning the better for you. In saving for retirement or towards a particular project, it is most advised that you start early enough right from the day you start to earn income so that over a certain period of time you would have build a substantial fund in your kitty that will almost surprise you.
Experts from Financial Tips on line said “Instead of making drastic lifestyle changes, build your savings muscle slowly by making small adjustments over time. After a while, you won’t even notice a difference-except in your bank account balance.”

What this implies is that waking up overnight to say you want to cut your spending or you want to save an amount from your income which you are not used to may be somehow difficult and could also be frustrating. But if it was what you are used to or something you are building gradually, it would be easier and less a worry.
Savings is perhaps the first key to achieving financial greatness irrespective of what amount of money you earn as income. And anyone who was yet to appreciate it and make it part and parcel of his financial plan can hardly realise a target because this is about building for the future.
Experts however believe that beyond taking the decision to save, you must also confront the psychological factors that form regular excuses why you could not continue with a savings plan.
Here is experts perspective on how one can make his or her savings habit stick?
Once you start saving, you will need to examine how committed you are to a savings plan. We all use excuses or have psychological barriers that stop us from saving. Tick the excuses you have used before.
•  I don’t earn enough.
• It seems selfish to pay myself first.
• My children always seem to need something new for school.
• I have so many debts to repay.
• I don’t know how to work out what I can afford – there is never any money left.
• Now that I am a single parent, there is never enough money.
• I don’t have the time at the beginning of the month to organise my savings.
How to stick to your savings:
1. Remember the Secret of the Lion – Pay yourself
First, Save Automatically.
2. Remind yourself – you are not being selfish by saving. You are ensuring you and your family’s future needs are met.
3. Arrange an automatic savings transfer, immediately after pay-day.
4. Put your money in a safe interest-bearing place where you can’t be tempted to use the money.
5. Once you have done this, re-budget your monthly expenses carefully – which ones can you really cut back on – perhaps on your cellphone, clothing, entertainment, etc.
6. Try not to open clothing and furniture accounts! They just tempt you to buy with money that you don’t have. You will be caught in a cycle of wasting big money on interest on your loans and debts.
7. If you have short-term debts or loans, sacrifice now and pay them back as quickly as you can. They are very expensive because of the high interest charged.
8. When you are tempted to spend, think of your longer- term goals. Picture yourself in the future. Spending now can destroy these goals.
Almost everyone, no matter how much they earn, feels that they don’t earn enough. The reality is that anyone can save with a bit of discipline and commitment. Of course, it means that we might have to sacrifice some of our less important spending, but the benefits in the long term will be well worth it. Not only will you be more financially secure — you will also sleep better!
This is what some people say about their savings success
•  I was without a job for 6 months, and managed to keep my family going – thanks to my savings!
• My savings are putting my daughter through university at the moment!
I have just bought a car for cash thanks to our 3 years of savings. I avoided paying thousands in interest!
Source: Businessday