How to start saving from your income

How to start saving from your income

Sep 3, 2018 by Ohood Awayes

Charles Jaffe once said, "It's not your salary that makes you rich, it's your spending habits." 

There’s some truth in this saying. One doesn’t necessarily have to earn a high salary in order for them to be able to save part of it on a regular basis. Therefore, before we start with the some tips and hacks on how to go about saving money, we would like to bring to your attention the fact that saving money is not an easy process, but one that requires resistance and self-control against the spending temptations we face daily!

So what is the most functional saving method?

First: You have to fully identify the spending method you currently follow so that you can build functional saving strategy for later. Let’s suppose you decided to embark on it once you receive your next salary. You can start ahead by recording your current daily spending for a month or however long you’d feel is good enough. In case you don’t wish to wait this long to start saving, you can synchronize this step with the following ones.

Second: Identify your sources of income. With the rise of online freelance work, it’s become only natural to have a sidekick job. Therefore, you should determine and pool all your income sources so that you have your total monthly balance before you begin with your saving plan.   

Third: Dividing the income. In preparation for the final saving plan, you should know your spending in its entirety. This means you should determine what your fixed costs are – from rental to internet and utility bills and your monthly installment – that have to be settled on a regular basis, whether per month, week or annum.

Fourth: Set your priorities. After you have divided your income, classify your expenses in order of priority. There are basic expenditures, followed by necessary ones but which you can do without, after which comes secondary expenditures and finally recreational spending.   

Fifth: Build a new spending strategy. This should differ from one person to the other; however, one common function that should be decided is the percentage of the salary/income preferred to be saved and how willing a person is to waive spending this percent of their income regularly! By deducting the basic expenditures, you will have the remaining of your income to either save in full or determine a consistent part of it to be saved. Once this is set and to test its validity, you can do a trial for a couple of months where you save this amount and consider it untouchable.  

So you started saving, what do you do now with the saved money?

This is your decision to make. Some people prefer to deposit the saved money in a safe lock in their house. Other find investing in this money is more profitable. Opening a saving account is considered the ideal option as you might receive an interest from the bank on a regular basis or you can enter a draw for a chance to win periodic prizes. To learn about this option and go about it in Jordan, click here.

Saving money is a habit that takes time to develop and get used to. Thus, it doesn’t happen overnight, plan smart and you will get a desirable outcome.

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