How I developed the habit of Saving Money

Since I started my journey towards achieving my financial freedom, saving has been one of my goals. Yesterday, a friend of mine asked me two questions:

1. How much do you save?

2. How do you manage your savings habit?

Starting with the first question: How much do I save? Well, it depends. My saving goes together with my goal – I always set up goals for myself and challenge myself towards achieving that goal. After all, I believe saving is a habit and it doesn’t depend on how much you earn. In my first post in this savings series I spoke about people who earn a lot of money and don’t have the savings habit. If you missed it, read it here.

How do you manage your saving habit? I believe that if you make savings a habit, you will be able to achieve your goals, no matter how small your income. The main thing is to understand your spending habits and identify your weakness.

My last post on How to overcome the hurdles of saving will help you a lot towards the process of saving and, once you understand, you can change by building new habits to help manage your savings.

Here are few tips on how I became a saver.

1. Set a goal. 

It’s important to start with a goal in mind. To get going, answer these simple questions:

What do you want?

Do you want to be financially independent?

Do you want to get out of debt?

Do you want to have your own place?

Remember, by setting your own goals it will give you a reason to save money. If you have multiple desires, just start with one goal and once you’ve achieved it, you can continue onto the second one.

2. Track your expenses.

Tracking your expenses and keeping a record of how much you spend will make managing your savings very easy.

Keeping a record of how much you spend will help you analyse your expenses. You can then avoid unnecessary costs and set up a budget for the most important expenses i.e Food, Rent, Bills, Clothes, etc

This will also make it easier to see how much you can save each month – even if it’s not much, that’s better than nothing.

3. Think about saving as paying a bill.

We somehow always remember to pay our debts and bills, right? I think of my savings account as a bill I have to pay each month. Thinking of saving as ‘pay your bills first’ can be helpful.

4. Earn more, save more.

Create a habit of saving a fixed percentage of your income. Let’s say your income is Tshs 1,000,000 and your saving is 20% of your income. If your income increases to Tsh 1,300,000, your saving will also increase.

In order to manage your savings habit, you also have to understand your spending habits – why do you buy things? Do you buy things to impress people, to be part of a group and fulfill other people’s expectations?

Remember, it takes time to manage and develop your savings habit, but once you get it right, your life will be simpler and you’ll avoid many financial headaches and finally reach your goals.

 

Follow the Barclays Savings Challenge and discussion on Twitter and Facebook. Share your own experience by using the hashtag #AfricaSaves. Visit the Barclays website for more information about their savings account.

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