In our journey to financial independence, it is vital to have a nice savings. In case you unexpectedly find yourself out of work. Or your relationship suddenly goes out. Whether you will jump into the deep end to set up your own business after all. Whether your car breaks down. Whether, as a self-employed person, you get pregnant and can work less for a while. For whatever reason, having a buffer behind gives a sense of freedom. Start saving smart and become a savings guru too with these savings tips to save money fast.
Savings tips to save money fast
In seven simple steps you can start saving and stick with it.
- Save for a clear goal
- Think about how much you can save
- Start!
- Pay yourself first
- Make it easy
- Follow elfin’s tips
- Also start saving on the stock market
1. Save for a clear goal
Knowing what you’re saving for makes putting money aside each month a lot easier. When you experience financial freedom, you experience it in many other areas of your life. No way you are stuck in a job that eats away at you or a relationship that is destructive, if you have the means to get out. Sufficient money gives you that so-called f*ck you attitude that makes you able to arrange your life according to your terms, and that is a great feeling! Decide what your goal is, how much to save, and go for it! These are common savings goals among elfin women:
- A vacation
- Purchase of a house
- Working less
- Study costs of your child(ren).
- A sabbatical
- Starting your own business
Many people also save to have a buffer for unexpected larger expenses. We call this an emergency fund. How much you need as a buffer depends on your own situation. Read this article on how much you should save.
2. Think about how much you can save
Determining this starts with understanding your financial situation. Next, create a long-term financial plan and determine the amount you want and can save. Do you need help with this? Then take a look at how Elfin can help you create a multi-year financial plan.
3. Start!
Resolutions are most likely to succeed when you start at a special time. For example, at the beginning of a new year, on your birthday or a new academic year. It can also be a new week. Scientists call this the fresh start effect. Put your start time in your calendar. Or totally right: set an amount right away that you will automatically start saving from your start date!
4. Pay yourself first
Pay yourself first. Make sure your financially independent future is as important as your rent, mortgage and insurance. Each month when your income comes in, make sure you transfer money to your savings account first, and start spending what’s left over. Warren Buffet:
“Do not save what is left after spending; instead spend what is left after saving.”
5. Make it easy
We want convenience, we want to automate, we want to be smart.
So from now on, how do you ensure that you both save, invest and live a nice relaxing life every month without having to think about money all the time?
- Make sure you know exactly what your fixed expenses are, and that this amount is available each month.
- Then you decide how much you want to save and/or invest each month. Save 20% of your income? Nice. Invest 10% of your income? Hats off!
- Automatically divert these amounts to your savings and/or investment account. Do this automatically and think of it as fixed expenses.
- Then you have your fixed expenses + savings and investments money fixed. And now? Relax and do whatever you want with the money left over for the rest of the month!
6. Follow Elfin’s tips
Tip 1: automate
But how do you make sure your savings account is nicely filled without it being a struggle every month? So how do you go about saving smart? How do you become a savings guru without putting yourself through all sorts of hoops every month?
Simple: automate!
Every month, on the day your salary is deposited – or on a fixed day if you are a self-employed person or business owner – you automatically have a fixed amount transferred to a savings account.
A bill you then don’t touch. And this temptation should be minimal, so our tip would be to open a separate account for it. Make sure the temptation to transfer money back and forth is minimal.
Tip 2: 1% rule
So what amount is ideal to save? This depends on your income, but try aiming for a 20% savings rate: putting aside 20% of your net income. Fail to go from 0% to 20%? Don’t worry, and start with 1%. The next month make it 2%, and so on. After a year, you then very gradually have a savings rate know your creating 12%!
7. Also start saving in the stock market
In addition to saving in your savings account, it is also interesting to explore saving in the stock market. Stock saving, for example. Want to learn more about investing and saving your money with a higher return than a savings account? Then read this article on investing.
Financial independence
To become financially independent, we like to invest a lot. But in our view, a well-stocked savings account, where you have enough money in it to be able to sing it out for at least three months should the need arise, is just as important. Follow these savings tips to save money fast and provide the foundation of your financial independence!
