We all have dreams and ambitions in life that require a huge amount of money. Some people might prefer getting a personal loan and fund their needs; while others may choose to abstain from increasing their debt burden and opt to take the longer route of saving.

However, starting to save is not always easy especially when doing it for the first time; and maintaining the discipline of saving at regular intervals is even harder for most people with a personal savings plan.  The following steps will help you to get started on the right footing; and when you are into the game of saving, they will help you to remain focused and maintain your regular deposits to your savings account.

Create a record of all your monthly expenses

Expenses are what deter us from saving and therefore the best place to start your saving journey is by noting them all down. These include the snacks you buy each day on your way to work, the amount you spend on newspapers, money spent on entertainment with friends and the regular monthly bills such as electricity, water, grocery, rent among others.

The goal here is to account for every dollar that goes out of your pocket in a given month. After listing all your monthly expenses you will then need to categorize them into major groups such as utilities, groceries, house rent etc. and then find the totals for each category in order to identify where you are spending much of your money.

Develop a monthly budget

Once you have a clear record of all your expenses arranged in order of their sizes, you then move on to listing all your regular income sources per month and sum them up to find your total monthly income. A comparison between your total expenses and your total income will then show you whether you are operating on a budget deficit or on a budget surplus. 

A deficit is a situation whereby your expenses exceed your income; while a surplus is a situation whereby your income exceeds your expenses. If you are having a budget surplus then you can maintain your monthly expenses at the same level and start saving the extra income.

Cut down your costs

If on the other hand  you are having a budget deficit, you will need to restructure your expenses and increase your income sources in order to first bridge the deficit gap and then start saving. A new job for an additional source of income might not come immediately and therefore the first step in bridging your budget deficit is to cut down on your monthly expenses. This will involve removing luxury cost items you can do away with from your budget and starting to survive with the basic things that enable you to live a decent life.

You will also need to make changes on your credit cards by shifting to credit cards with rewards and which charge lesser interest rates. This will help you to both reduce your monthly credit card expenses, as well as help you to earn pseudo-income every time you go shopping; through the loyalty points you get which you can redeem later on for actual goods and services at no extra cost.

Develop a concrete savings plan

After disciplining yourself to survive on basics of life and bridging your budget deficit, you will start earning surplus income that will need to be planned for in order to avoid wasting the money after accumulating it for a long period of time. The first step in planning your savings is setting a minimum amount that you shall be saving every month.

You then need to make your savings automatic in the sense that, instead of you withdrawing the money and depositing it to your savings account; you have a standing order such that your savings are deducted even before you can have access to your salary. This reduces the temptation to spend the amount meant saving and smoothens your savings plan.

Have a sound goal for saving

Saving just for the sake of it will only accumulate huge amounts of money in your bank account which you will eventually blow away in a wasteful manner over unplanned expenditure. To be more disciplined in your savings plan, you need to have a very sound objective for saving in the first place.

You could choose to save for your school fees, to buy a car, buy a home, for a vacation or any other thing that you value most. Having these bigger goals helps you to remain committed in your saving journey; and when the target is reached the money is utilized prudently in a valuable thing that improves the quality of your life.

When you start saving from scratch, the end always justifies the means. The sacrifices you make in terms of cutting down your expenses and looking for additional part-time engagements to boost your incomes; will only be valuable if the end goal is big enough to keep you committed to the course.

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bare bones budget
via stockmonkeys.com

If you’re in debt, you may find yourself trying to balance bills, debt repayment, and miscellaneous expenses. A great way to start paying off your debt is to create a bare bones budget. This budget will show you how to live on less, and get your financial life back in order.

Go Through Your Current Budget

The first step to creating your bare bones budget is to evaluate your current budget. If you don’t have a budget, it’s time to create one. Go through your income and expenses from the last few months, and write everything down in categories. Once your current budget has been assessed, it’s time to determine your wants vs. needs.

Wants vs. Needs

Looking at your current budget, are there ways that you can cut back? A bare bones budget is exactly what it’s called...bare. It involves your needs only, with very little room for wants.

Could you be spending less on food? Could you live in a smaller or cheaper place? What about current bills? If you are trying to pay off debt a little faster, it’s best to cut bills like cable and phones until you can really afford them. There are other ways to enjoy TV for free, and you could always get a to-go phone. ...continue reading


college educationThere are many ways to fund a college education. Loans, scholarships, working between classes and saving during high school are some of the ways students can afford college.

There's also another reliable way to pay for it — hit up your parents.

The average cost for an in-state public college for the 2015-16 academic year averaged $24,061, and was $47,831 at private colleges, according to a survey by College Data.

Graduates may eventually cover those expenses with future earnings, but that's years after leaving college and doesn't help at all before starting school.

For parents who are generous enough to pay for some or all of their children's college education, it can require some sacrifices. And I'm not just talking about taking out a loan, dipping into a retirement account or taking out some equity in your home.

Cutting vices

Some families have to make life changes to be able to afford college. These can go well beyond stopping smoking or not going out for coffee every weekday. Getting rid of your vices makes sense for more than monetary reasons, but some pleasures in life are worth keeping, even if your kid has to get a college loan or two.

Liberty Bank of Chicago recently put together a graphic (at the bottom of this post) that lists simple vices that can be cut to help struggling families save for college. The bank based the total savings amount for each item on putting the money in a savings account for 18 years that earned 3 percent interest.

It's interesting to see how much can be saved by not doing something for 18 years — all of your child's life.  ...continue reading