Are you the type of person who is a savvy money manager? Or do you usually find yourself barely surviving until your next paycheck arrives? If you fall under the latter category, now is as good a time as any to open a high interest savings account for yourself and seriously start saving money.
You’ll never know what financial emergencies you might encounter along the way – which is why it helps to establish a savings account. This is a secure way of saving money in a bank, with the added bonus of earning a particular percentage of interest for the amount that you will deposit.
Saving Money 101: How to Create a Spending Diary, Keep Tabs of Your Spending & Get a Head Start with Your Savings
If you’re like the average person, there would be a lot of instances when, after withdrawing $100 from the ATM machine, you will wonder where all the money went about a day later.
This normally happens when your not keeping a good track on your spending patterns. This is not a good method if you are dedicated about growing your savings account that you have opened.
So what’s the best way that you can use to get a head start with saving money? You can do it the old-fashioned way: by creating a spending diary, keeping track of your spending habits and adding money to your savings account so that you can start saving money.
Basically, the spending diary will allow you to monitor the ins and outs of your finances and keep track of your savings account and saving money habits. Going back to the example mentioned earlier – if you did take out $100 from your savings account through an ATM machine, you will see where that amount actually went.
After withdrawing the money, write down on your spending diary which items you bought with that $100. Did you spend the money on a magazine or morning coffee while commuting to work? Did you use it to buy food? Or did you suddenly have an ‘attack’ on your conscience and you actually put that amount towards your savings account?
If you’d rather not use cash then try a debit card such as Visa debit and then cross check your spending via your online banking.
Once you have developed the habit of writing down on your spending diary the ins and outs of your finances, you will be able to see which aspects of your spending you can actually cut back on. If you see that you’re spending too much on eating breakfast outside of the house on your way to work, you may want to pack a hearty sandwich for yourself. Better yet, wake up earlier and enjoy the financial and health benefits of eating a nutritious breakfast at home.
Once you stop wasting money on items you don’t require you will find your savings can start to increase at a rate faster than you expected. By doing this you can classify which purchases are wasting money, which are valuable and which can be done once in a while.
In addition, your savings account will be given a boost because the money that you will be able to save from the unnecessary purchases can go towards saving money instead. Keeping a spending diary takes a little getting used to at first. However, once you have gotten used to the notion of keeping tabs of your spending, saving money will be much more instinctive and less of a burden or a chore for you.
Article by Richard Greenwood who runs the Click 4 Group to help people compare credit cards and other banking products and then make an application online.
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