Before you even started making your own money, perhaps
you already learned the lesson that the key to achieving long-term financial
security lies in practicing financial discipline and building good saving
habits. Financial discipline involves making conscious choices about spending,
doing one's best to avoid falling into debt, and focusing on accumulating
wealth over time. Good saving habits, on the other hand, pertain to
consistently setting aside a portion of one's income or allowance for future
needs and emergencies. Together, this set of practices helps create a financial
safety net for an individual and enables them to invest in opportunities that
can truly grow their wealth.
But as much as you agree with the principles of saving
money and developing financial discipline, you may also be quick to admit that
they're easier said than done. It can be especially challenging to balance
everyday expenses while resisting the temptation to spend on wants rather than
needs. Plus, with easy access to online shopping and installment plans, it's
more convenient than ever to make impulse purchases or financial decisions that
won't reward in the long run.
All the same, now is the best time for you to get into
the habit of saving and to exercise financial discipline and restraint in most
aspects of your life. Here are some practical strategies that you can try now
to make a big difference in your financial future:
1) Open a Savings Account
with Competitive Interest Rates
You don't have to do anything too complicated to start
your savings journey; start by opening a competitive savings account, which
will be one of the best tools for growing your money safely.
When choosing an account, it's essential to compare
interest rates to maximize the return on your savings. A digital bank like Maya
Bank can be counted on for a savings bank
account Philippines'
depositors will greatly benefit from. On top of interest rates that can reach
up to 15% p.a. (which is much higher than those of traditional banks), Maya
also boasts a digital banking platform that makes it easy and convenient to
monitor your account around the clock.
On a savings account from a digital bank like Maya,
you'll also enjoy features designed to help you save smarter. Maya's Personal
Goals, which are goal-based savings accounts, will allow you to categorize your
savings for different objectives, such as a travel fund, emergency fund, or
education savings. Try these features to concretize your goals and therefore
make it easier to set aside money for them.
2) Make Savings a
Non-Negotiable Part of Your Monthly Budget
Another way to improve your financial discipline is to
treat your savings as a non-negotiable monthly expense. Before you receive your
salary or income, set aside a specific amount for savings just like you would
for other expenses. This method will help you perceive your financial goals as
a priority over non-essential spending and avoid the latter more easily.
3) Find Strategies to Cut
Unnecessary Expenses
Saving money doesn't mean depriving yourself, but it
does require you to make smarter financial decisions. One of the most effective
ways to improve your saving habits is by identifying and cutting unnecessary
expenses.
Begin by tracking your monthly spending, and once you
have a clear view of your spending habits, look for areas where you can cut
back. For instance, instead of subscribing to multiple streaming platforms,
choose one or rotate subscriptions. Small daily habits, such as buying coffee
or ordering food online, can also add up to significant costs over time; try to
reduce these treats from multiple times a week to once a week. Reworking your
habits can make a big difference in how much you end up spending from your
monthly budget.
4) Wait Before Making Any
Non-Essential Purchases
Another strategy for improving your financial
discipline is to adopt a "waiting period"—typically 24 to 48
hours—before making any non-essential purchases. This cooling-off period will
allow you to think clearly and determine whether the purchase is necessary or
if it's just an impulse buy. More often than not, you'll find that many of
these items are wants rather than needs.
Also try incorporating a waiting period into your
shopping routine. This can transform your financial habits, making you more
mindful of your spending choices and enhancing your saving potential.
5) Develop a Debt Repayment
Plan Wherever Needed
If you're carrying debt, whether from credit cards,
loans, or other sources, structured repayment plans will be essential towards
helping you regain and maintain your financial stability. Make it your goal to
craft a solid debt repayment plan for all of your existing debts so that you
can pay them off faster and free up more money for savings and investments.
Start by listing all your debts, including the total
amounts, interest rates, and monthly payments. Next, prioritize which debts to
pay off first. You might consider paying off high-interest debts first or
paying off smaller debts first to gain momentum and motivation. Either way,
allocate a fixed amount of your income each month towards debt repayment. This
will keep you on track and prevent you from missing payments, which could lead
to additional fees, being charged higher interest, and difficulties shedding
your debt.
6) Avoid Accumulating New
Debts
Another important aspect of financial discipline is
avoiding new debts, especially unnecessary ones. Debt can quickly accumulate,
making it harder to save and achieve your long-term financial goals. While some
forms of debt, like a home loan or a business loan, can be necessary, you'll
want to avoid taking on debt for non-essential purchases.
To avoid accumulating debt, try to stick to a
cash-based or debit card system for daily purchases. This will prevent you from
spending money you don't have and ensure that you're living within your
means.
7) Consider a Side Hustle to
Boost Your Savings
Lastly, if you find it challenging to save with your current income, consider taking on a side hustle to provide you with additional income that you can earmark specifically for savings. For instance, if you have a knack for writing or graphic design, you can look for freelance work. If you enjoy cooking, why not start a small catering service or sell homemade goods? Regardless of what side hustle you choose to pursue, the key to success is to choose something you enjoy that also fits your schedule.
While it won't be easy to improve your saving habits and financial discipline overnight, you have to remember that it's achievable to do so. Start by evaluating your current habits and making small adjustments, and you'll be well on your way to saving up for major financial goals and trusting yourself better with your hard-earned money.
