Friday, March 1, 2013

3-Step Practical Way to Start Your Saving Habit

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Pocket Check!

How much money do you still have in your pocket before the next payday?
How much savings do you have in your bank account?
If you have a little trouble saving money, then you might want to try these simple and practical ways I follow.

Here's what I do when my salary is credited to my account.

1. Budgeting

In my previous post Learn the Right Formula to Save, I discussed about the 70-20-10. I budget 10% as my tithe, 20% for  my savings and investments, and 70% for all my expenditures. Here's the sample format I use:

For my 70% expenses, you can notice that the Food, Fare and Miscellaneous are formatted to be aligned to the right portion.It lets me identify that I am budgeting for my Allowance Expense but it is broken down to three items: Food, Fare and Miscellaneous. I put miscellaneous under allowance in case I have "unexpected" expenditures (team lunch out, food trips with food and travel bloggers Metro Street Bites and Geejay Travel Log, and sudden meetups with friends).

2. Divide your Cash and Label.

It will help if you don't put all your cash in your atm because it becomes easy for you to withdraw cash anytime. Leave only the amount you will use for your allowance and withdraw all the amount that you will use to pay for rent, utilities, credit cards, tithes and investments. This helps you avoid spending the money intended for your other expenditures. For my stock investment, I immediately transfer it through online banking and deposit it to my COL Financial (previously known as Citiseconline) account to ensure that I follow my 20% budget for stocks and investments. Know more about stock investment for newbies here.

Divide your cash, label them and put them in an envelope (or anywhere safe from your easily tempted hands).

3. Strictly Follow Your Budget.

I know it could be tempting sometimes to spend all your money whenever you have something you can pull out of your pocket. But strictly following your budget has a lot of benefits and rewards. Few of these benefits are:
a. Being debt free (No Overspending means no borrowing of money)
b. Having savings and investments. (Grow your money. See how I do it here)
c. Developing the habit of managing your finances (A habit not all of us have)
d. Avoiding unnecessary expenses (Since you don't have budget for this)

Some say "I will save up when I have extra money". Others say "I will just do it next year". I say "Save now".
Why? Because if you can't save money with your current status, even if you have salary increase, you won't have "extra money". Your expenses will go up as your salary goes up. And, if you can't start saving today, you won't be able to start saving in the next few weeks, months or years because developing a habit isn't done overnight. Motivate yourself and strictly follow your budget. Then, time will come you will reap your rewards.

Happy Saving!

Hope this post helps. Please feel free to leave your comments.


  1. I am really having trouble saving money but with this blog, I was enlightened. Thanks. Keep it up.

  2. Thanks! It's really nice to see appreciation from readers. Keep visiting! :)

  3. Mami! you're the best! :) so proud of you :)