Tuesday, February 19, 2008

Saving for the rainy days

A friend recently asked me on tips on how to save money. I was dumbfounded, reason been I am not a good keeper of my bank accounts and money myself. So how to expect me to advise another person on how to save money? Btw, that friend of mine is going to start a family soon, so she was asking me for an “expert advice”.

Frankly speaking, I have not been able to save money since I started family, as family requires more money! Children need to be fed, and in few years time, my daughter will be going to kindergarten. As she grows, I am assuring that more money needed to be spent on her education, food, daily expenses etc. Now we need to settle our house and car loans, and in need of more money for new house’ furniture and fixtures soon. And not forgetting to settle my credit card too. At the end of the day, I didn’t really save much.

Do you know that at the end of the day, our retirement saving were not sufficient for us to survive after we retire? I am pretty sure that you know that you cant depend on your EPF money to feed you after retirement. So start to save now. Some may say that investment in unit trust, share markets are beneficial as they guarantee good returns but they are full of risks! I am sure you would be worry to death to part with your hard earn money into those investments without knowing what risks they may incur.

Lifestyle also determine your saving scheme. A study shows that lower income group saved more than middle income groups. Reason? Lifestyle. The higher income you earn, it is understandable that your purchasing power grows and you expect to buy more luxuries to fit in your better lifestyle. You join an exclusive gym centre, buying new car, bigger house, and enroll better schools and provide better for your children.

We all know that we need to save but most people don’t save like they know they need to save. It is because saving is not the priority on that time, as they prefer to use the money to buy other items, or pay off debts on that particular time. We just not making enough money to save it! So in order for you to save your money, it is time for you to prioritize saving as number one priority instead of buying.

So, the secret to saving is actually lie in your mind. Turn the saving into your priority. Ask yourself what bills are important and need to be settled. After that, the next question would be “Who should I pay first this month?” The answer is YOU!! Until your pay yourself first, you will never save money. Do not be slave to those fanciful advertisements that luring you to separate your money from you!!

It is never too late to save! Start now, prioritize and always remember to pay yourself first before start paying others.

5 comments:

Hye said...

Great tips. I think another way to save is to divide your money and save part of it before planning for your budget. I mean if you have $500 budget a month, you have to see to it that you save $100 and use the $400 for the expenses. I think one reason why some people can't save is that, they only save whatever they did not spend.

Hye of Space of Reality

My Sassy Mind said...

Very helpful tips!!! Thank you.

Nick Phillips said...

I know what you mean. Making ends meet when you start a family can be daunting and don't even think of saving as there is so many things to worry about.

I leave all my financial things to wifey to handle. She can save better than me :D

nyumix said...

Nice post and great tips for me too.

I have a tag for you Rose.
http://nyumix.blogspot.com/2008/02/tag-from-liza.html

Agnes said...

hi Rose
you are right! the more u earn the more you will tend to buy and you feel like you want to upgrade your car, house and everythings...

For me, i have a fund that every month i will definately put some saving there...and i have budget our monthly expenses carefully..most of the time i spend more on food so that was not too bad for me.