Manage your AIA plans, employee benefits, stay healthy with AIA Vitality, and access healthcare services.
{{title}}
{{label}}
Whether you’re saving money for a vacation or to pay the bills, there’s always the expectation of a massive blow to your bank account, and yes, it hurts. We all have different views on saving money. Some will have a healthy mindset for saving while others will find it somewhat tough. If you are having difficulties in managing your money, we have outlined the reasons for why it may not be working out for you, how you can fix it, and how you can go even further with your savings.
You may have heard that saving money is an easy way to buy your dream home or get out of debt quickly. The key to saving comes down to tight budgeting and cutting back on expenses. While these two strategies do help, they should be short term goals for a long-term strategy to manage your finances.
If you’re saving to pay your bills and are only spending on the necessities of life, then you are on the right path. This is what we consider a healthy mindset for saving money. However, are you prepared to go a step further and start saving for the future and grow your savings significantly?
✔ Keep a Healthy Mindset
The number one unhealthy mindset is saving money for the sake of having more money to spend. Without a clear vision of what you’re saving for, you’re more than likely to dip into your savings and waste money on unnecessary items.
Nonetheless, don’t beat yourselves up if you dip into your savings now and then – it’s human nature. However, what you must understand is that savings are called savings for a reason. Unless you are in an emergency, then there isn’t any reason to empty your piggy bank.
The reality about saving money is that building long-term strategies that are practical is the only way to win in the long run. Your lifestyle must change to reflect your life goals, with a sensible perspective. This can be done by saving money in the short term and slowly expanding that savings by putting small amounts in low-risk investments.
Here are some ground rules to make your life a little easier when trying to get your finances together.
✔ Keep Track of your Expenses
The first step is to track all your expenses; this way you have a starting point and a point of action. This will take some digging up of some old bank statements and evaluating every penny you spend in a week. But trust us, it’s going to help you in the long run.
Once you’ve made a plan, then you can set yourself a budget where you can save and spend comfortably. Plan to save by working out a percentage of how much of your income should go towards your savings. This all depends on your expenses, but we recommend 10-15 percent of your income.
✔ Set Yourself a Goal
The next step is to have something to save for and decide on your priorities. This can be short-term goals (e.g. saving for a vacation) or long-term goals (e.g. saving for your children’s education or your retirement). Remember, without a clear goal, you’re setting yourself up for a financial rollercoaster. We suggest writing your goals down so that they are set in stone.
✔ Let the Magic Happen
Once you have your plan of action, let the magic happen. You won’t have to do a thing! Save automatically by setting automated transfers between your checking and savings; this is something most banks offer. This way you don’t ever have to think about saving money, and it eliminates the temptation to spend it.
After saving through budgeting has become second nature and you have accumulated a fair amount (roughly three to six months’ salary), you are now eligible to take advantage of your hard-earned savings. Achieve this well-earned success from your financial goals through investing strategies.
Although savings and investment come hand in hand, it isn’t all rainbows and sunshine. It requires a good level of strategic planning along with confidence in what type of plan you will be investing in. Here are some more ideas on investments and how to manage your finances so that everything is in-line with your priorities and goals.
Reduce your stress by having a savings plan from your income at any age. Coupled with today’s financial technology, generating savings is much less manual. Start saving, and start growing today!
The above articles are intended for informational purposes only. AIA accepts no responsibility for loss which may arise from reliance on information contained in the articles.
Rainy days, dream holidays, kids’ education, retirement - whatever you’re saving up for, it’s important that you have the right plan to start growing your nest.
