Starting to manage your money can be easy once you identify the main factors that make it difficult for you to achieve your financial goals. Here are the top 5 reasons why you can’t save and realistic tips that you can easily follow to get you closer to your goals:
Following Trends
The fear of missing out (FOMO) or being left behind is one of the reasons why your resources get depleted. Keeping up with what’s trending among friends and online influencers can be expensive. You may end up buying things online not because you need them, but because they are new. This can lead to spending money you don’t have yet, and if not managed well, can snowball into long-term debt, setting you back a few years.
Take control of your finances and make smart choices early on. Instead of focusing all your efforts and resources on looking good for social media, start investing in small things that can increase in value over time.
Reallocate some of your money to simple investments like Unit Investment Trust Funds (UITFs). These allow you to grow your money with a low starting amount and provide flexibility based on the level of risk you are willing to take. You can choose a fund that best suits your needs and risk appetite.
Not Tracking Expenses
It might take some time to list your expenses and see where your money goes, but you can’t control what you don’t know or remember. Staying on top of your finances means you can plan, allocate, and control your money in ways that benefit you.
Help yourself achieve your savings goal by creating and sticking to a budget. List your income, non-negotiable expenses, and other financial commitments. Allocate your income to these items so you know how much room for spending you have left.
Tracking whether you stick to your budget is important too. With a busy schedule, doing the math manually can be tough. Your digital banking transaction history can help. You can easily check the details of your transactions by opening your bank app.
Spending on Non-Essential Items
Updating your wardrobe and gadgets can be important, especially if needed for your job. Before buying new items, audit what you currently have and what you need. Knowing your needs will help you shop online without overloading your cart. It also helps save space, as you’ll know if you have room for new purchases.
Invest in classic, timeless, well-crafted pieces to avoid buying multiple items frequently.
Inconsistent Saving Habits
The struggle of saving also lies in how you save. Create a sustainable saving habit that works for you without crippling your ability to meet daily needs. You can take inspiration from others’ saving methods but adjust them based on your abilities. Consider using the envelope method, 52-week money challenge, or 12-month saving challenge.
You might also consider having a separate savings account dedicated to your savings. Schedule regular transfers to this account to maintain consistency and keep your savings secure, even from yourself.
Impulse Buying
Sales like the 12.12 sale are great for scoring deals, but ask yourself, “Do I need this or do I just want it?” Resist the pressure to buy when you see the word SALE. Sale events are seasonal. If you miss an 80% discount now, you can wait for the next one when you have more financial flexibility. To decide if an item is a want or need, consider how often you’ll use it versus its cost.
Saving is difficult, especially with multiple eCommerce apps sending sale announcements, new releases, and other notifications. Outsmart your shopping apps and keep a constant reality check on your finances.