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At one point in our lives we've all thought of saving so much money enough to make you wealthy in the future. As a kid, I was determined to save about ₦200 ($0.25) every single day for six years ( that was the Total time duration of my secondary school). Just like everybody else I failed to do so because it wasn't just possible to suffer the important things for my savings.
As an adult I came to realize what saving really means and what it takes to achieve a prefect saving account.
So what are the things to know when saving?
Identifying your necessities
Your necessities are priority, without which you can't survive. You should make a draft of things you actually need to survive and this should be things that are personal to you.
Identify how expensive the items or products are going to be and strategize ways to buy products with reduced prices while getting the best quality. You don't need to buy a rainbow designer round neck shirt, when you can literally get a quality 100% cotton plain round neck for cheaper. Let's make coffee an example, for someone who buys Starbucks coffee every single day would spend $2 - $3 on a cup of it, For a month you could spend about $75 on Starbucks alone, in a year you can spend up to $900 on Starbucks coffee. But, if you buy a coffee pod as low as $16 which actually contains a lot of pods that would last almost 5 months, and then buy a coffee machine for 30-70 dollars you are saving a lot of money for the next few years by saving $816 dollars for that year.
This example clearly shows that coffee beans and machine are necessary, and not Starbucks coffee. Necessities could also be spending money on some family members like your parents and siblings, this should be put to note when identifying necessities.
Identify your liabilities and assets
Make a draft of your assets and liabilities, your assets could include your vehicle or personal houses, cash, savings and check accounts.
Your liabilities on the other hand should include loans ( business, student, bank, etc...), medical bills, phone, light, gas and water bills and some of your insurance premium. Subtracting your liabilities from your assets gives your net worth. understanding your net worth gives you an idea of just how much to save.
Create a specific saving goal
Earlier on I said ;
As a kid, I was determined to save about ₦200 ($0.25) every single day for six years ( that was the Total time duration of my secondary school). Just like everybody else I failed to do so.
kids only save based on the material things they crave; saving for a new PC, saving for a robot toy, or a princess dress, or the latest star wars lightsabers. This saving goal could be easily tarnished once you loose interest in what you want to achieve. Your saving goal should be specific, achievable and time bound, in simple terms, instead of creating a vague or unrealistic saving strategy you should set a specific and achievable goal with a good or realistic time frame. Such as saving up to $7000 within a year for future investments. This strategy prevents you from loosing focus on your goal and is more efficient.
Decide where to save and how much to save
How do you know the amount to save?
Create a budget by subtracting your average monthly expenses from your actual income. Doing this gives you a knowledge of how much you can actually save monthly within causing much damage to yourself. So let's take for example you make about $5000 per month,but your expenses is about $3000 monthly you get to save about $2000 monthly, or $1000 monthly, this overall gives you a perception of how long it will take you to achieve your goal and how achievable your goals are.
Finally, where to save?
This depends on the reason you are saving, if you're saving for something unavoidable like emergencies, or pay to someone you owe, you would want to save in a place where your money is easily accessible such as a bank.
Saving for future investments, you might want to save your money where it's value wouldn't diminish, such as crypto stable coins.
Conclusion
Sometimes it's not just about having the perfect saving strategy, it's also about having enough focus and consistency to carry on the strategy to achieve your goal.