How to Save When There’s Nothing to Save?
Everywhere, both online and offline, you will hear everyone nagging about the importance of saving. But have you really thought about why does it matter?
If you are someone who sees more withdrawal than deposits in your bank account, please read on.
What is the Importance of Saving?
Saving is a hard habit to build, but one that should be started off as young as you can. First, having a substantial amount of savings will protect you from real life emergencies. And you should never ever underestimate emergencies, because if there’s anything that you can count on to happen at least once in your life, it’s that an emergency can strike you down financially. Whether it’s a hospitalisation or a loss of job, having sufficient savings can help lessen the impact to you and to your family.
People fall into bad debt mainly because they don’t have a cushion when emergency strikes. By saving little by little from your salary and building your emergency pot before something unfortunate happens, you can avoid the route of borrowing money when you need it most.
So How Do You Start Saving When You Don’t Have Much to Save?
It’s a common excuse we hear – “I don’t earn much and have nothing left for saving.” First off, your income has nothing to do with it. It’s all about your willingness to set aside something every payday, no matter how small. Your £5 can go a long way after a while of saving consistently, than saving nothing at all because you’re waiting for that perfect moment when you have a bigger income. Guess what? That perfect moment will never happen, because as you earn more, you get to spend more.
To succeed, it’s highly important to pay yourself first. Commit to a certain percentage of your salary and have it automatically sent to your account before you even have a chance to get your hands on your pay cheque. Do not worry about the amount. Let’s say you can start with 5% first, then slowly increase as you get used to the idea of saving.
It’s also important to cut down on expenses whenever possible, especially if you’re already struggling to make ends meet. For instance, you may sacrifice those cable bills that you don’t have time to watch anyway, or ditch the landline telephone. Freeing up a few expenses, no matter how small, can help build up your emergency fund that much more quickly.
Finally, if you’re still struggling despite your best efforts in cutting down expenses, you may want to consider finding an extra source of income. Though working for 12 to 16 hours a day may not sound appealing, it could temporary help you until you have a high enough stash of rainy day fund waiting to be used. Also, you may want to explore part time options that pay decently well without stressing you out. You may want to just baby sit once a week, walk your neighbour’s dogs, or teach English online. These jobs don’t require you to sign up for a full time commitment and so always have the option to stop or continue once you’re reached your target.