Learning how to save while enjoying life is the best thing you could do for yourself. You’re never too young to start saving and investing. Starting to put money away now will turn into a habit as you get older. The earlier you start investing, the more money you’ll gather over time.
Read: How To Invest In Stocks: Step By Step Guide
That’s the power of compound interest. Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it”.
When you think about life, it can feel like you have a long time to focus on savings goals you want to eventually achieve. But sometimes life can seem to pass by in the blink of an eye, so it’s important to remember to have fun with friends and family, too.
Sometimes, the two feelings contradict – do you have dinner at a popular, new restaurant now, because life feels short, or do you stay home for the evening, because you feel like you have a long lifetime ahead?
It’s really tough to make space for saving in an already-stretched budget, but embarking on spending detox can quickly reveal pockets of wastage that could just become a nest egg.
Here’s how you can save while enjoying life: Follow this tips and you’ll get to live your best life.
Understand your cash flow
If you want more money to save for the future or to spend now, you have to understand your current spending patterns and habits to get there. Check in on your spending weekly; that takes far less time than a monthly review, and it’s easier to catch places you may have spent more than you planned.
Read: How to budget like a pro
In order to assess your financial situation, ask yourself questions about how happy your current lifestyle makes you and how you’re handling your money.
Learn to say “no” by deciding on your “yes.”
The clearer you are about what you want to do in the short and long term, the easier it is to make spending choices that you’ll be happy with when you look back at them.
Automate your savings for present and future goals.
If you can save that money automatically before it reaches your bank account, you’re far more likely to continue saving those funds in the future and even to increase your contributions over time.
Read: Why you need an emergency fund
Plan for spontaneity
Budget in money that is purely for spontaneous spending. you know there’s money in your budget that is there for the sole purpose of spending it, it protects the money that you’re saving into other accounts by providing an outlet for a spur-of-the-moment decision.
Free Course: How to budget like a pro
Look for an extra income
If your budget is tight and you can’t add fun money, consider getting a side hustle. Maybe a part-time job or start a side business. Money from your job can cover expenses and build your savings, and money from your hustle can pay for recreation and entertainment.
Read: Why you should start a side hustle
Explore frugal hobbies
There are plenty of ways to enjoy life while saving for the future. However, you’ll have to get creative and look for hobbies and entertainment that don’t take a lot of money. For example, you might explore photography and spend an afternoon at the beach or a local park taking pictures. And if you live in a city, there might be free museums or galleries you can explore during your free time that won’t break the budget.
While we don’t typically get into hobbies to make money online, some of them can become a side hustle or thriving business that generates a stream of income.
Free Course: 7Rs Of Wealth Creation: Multiple Streams of income
Set milestones
Even if you’re saving for the future, it’s important to reward yourself. For every large goal that you set, set mini-goals and reward yourself for hitting these milestones. For example, if you want to save R15,000 within the next 12 months, you might reward yourself with an inexpensive splurge once you hit the R5,000 mark, and again once you hit the half-way mark. This is an excellent way to keep your goal on track.
Develop new goals
If you find a disconnect between your lifestyle goals and your retirement goals, it very likely means you need to either develop new goals or revise your existing ones. Make sure that these goals are realistically based on your financial resources. Again, you will need to distinguish your wants from your needs
Saving money is an excellent goal, and you should be determined to reach your goal. But at the same time, don’t obsess. Life is about responsibility, but it’s also okay to have fun.
Read:How to Change Your Money Mindset
Devise a plan
Once your lifestyle and retirement goals are in place, the next step is to determine whether they can coexist. Incorporate the two sets of goals into your budget and add dollar figures for each lifestyle goal. This is one of the key areas where you will begin to make any necessary adjustments by cutting out non-necessities.
Read: How to stick to your financial resolutions
Do not jeopardize your retirement goals. Instead, cut back on less-important budget items.
Read: How Much Should I Save For Retirement
Get out of debt
Like you, most South Africans are looking for ways to earn an extra income. In several cases, the money is needed to repay outstanding debts. If this resonates with you, then you could consider reducing your monthly debt repayment to alleviate some of the financial pressure before your start splurging money you don’t have.
Free Course: How to pay off your debt
Consider applying to reduce your debt. DebtSafe team helps thousands of qualified South Africans to become debt-free each year.
Enroll here for free. All our courses are free.
