Having a monthly savings budget can be a great way to reduce a lot of hassles and headaches that are brought on by debts and overspending. To a lot of people, the term budget is usually associated with saving and can create a big scare and eventually cause people to be turned off by it.
Why you should start monthly savings
• Helps you reach your goals by forcing you to prioritize your spending.
• Curbs unnecessary spending.
How to save
Set your goals
The first thing you need to do before you even start saving money is come up with both short term (vacation, debt payment, taxes, gifts) and long term goals (Insurance deductible, staying afloat when you’re between jobs, retirement, mortgage). These could include things like paying your credit card to a mortgage payment. Short term goals will help your outstanding debts that will, in turn, free up more money that you can save in the long run.
https://www.mint.com/budgeting-3/monthly-budget-template-track-your-spending-by-month
Keep track your spending habits
Another thing to do is to keep all your receipts to determine how much you’re spending every month. This will help you determine how much you can shave off towards saving. A good record uses the average spending of three months to develop a more accurate amount that goes into expenses.
https://www.mint.com/budgeting-3/monthly-budget-template-track-your-spending-by-month
How much should you save
Two things affect one’s ability to save;
• Net income
• Spending habits
Generally, it is advisable to spend anywhere up to 20% of your net income in savings, this based on the popular 50/30/20 saving plan. The 50% will be directed to your necessities while the remaining 30% goes to discretionary items.
a) Net income
The most important thing to consider before starting on your monthly savings template is your net income.
Another thing to consider is that while some people get stable pay, some pays fluctuate (tips, working hours, commissions) getting a three month average net income will help account for any flactuation.
b) Spending habits
Most people like to spend, fewer like to save. Knowing your spending habits can help you curb unneeded expenses to increase the amount of your monthly savings.
https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/creating-a-budget
Conclusion
Having monthly savings has its benefits. Most people may find it hard to start saving initially, but with dedication and patience, one can get to reap the benefits that are associated with saving.