We are sharing seven easy steps to help you come up with a great savings plan and still be able to meet your other obligations.
- Know your income and your expenses – It is important to know how much you earn, how much money you spend and what exactly it is that you spend your money on. This is essential so that you are sure that you don’t spend more than you earn.
- What are your primary concerns? – You need to identify your main financial concerns in order to create an effective savings plan. They could be job security, education costs, medical bills, money which you owe or lack of savings. Find out which issues worry you the most and then think about the different ways in which you can tackle those concerns. If job security is a major source of concern for example, you may need to start building emergency savings.
- Order your priorities and set your goals – People have different financial priorities. Decide what YOU want to save money for, whether it’s paying for education, saving for a trip or wedding, paying off debt, building future savings for retirement, or other purposes. You will then need to check how your income matches up with your list of priorities.
- Determine timeframes – When considering your financial priorities, you should also be thinking about a timetable for achieving them. How long will it take for you to reach your goals? What are your target dates?
- Create a budget today – YES TODAY! You will need to save a certain amount of money every month for each of your financial goals. How much you save depends on how much you earn and how you can cut down on your expenses. Living on a budget means being vigilant about your spending habits. Find out areas where you can spend less and save more money for something else.
- Finally, create an automatic savings plan – After calculating how much you want to put aside each month, you can set up an automatic savings plan. This can be done by setting up a monthly standing order on your salary account with the funds going directly into a savings account.
Financial experts advise that you save 10% of your earnings and to live off of 90. Also, you must make a commitment to yourself not to touch your savings account for any reason other than fulfilling your established financial goals.
Don’t wait until tomorrow; create your savings plan today.
This has been courtesy Fidelity Bank as part of The Bankers Committee Financial Literacy Public Enlightenment Programme brought to you by The Bankers Committee, comprising all the commercial Banks in Nigeria and the Central Bank of Nigeria, CBN.