How to start saving

My last post showed a formula how to save money. Sure, that is how to save money but what does it take to save money? How should I start?

Here are some steps on how to start:

1. Have a goal

2. Define wants and needs

3. Have discipline

Goal

In the adult world, we always ask “what’s in it for me?”. “Would I get anything if i do this?”. As people, we do not want to waste our energy in doing something without any purpose, we always do something because we have a reason, we have goals.

Same way in saving, we have to save money to reach our goals, short term and long term goals. Not only we should have short term goals, we also need long term goals such as retirement.

When you set aside money for your short term goals, always remember to set aside money too for your long term goal. Many people end up financially struggling after they retire because they did not plan for retirement. SSS and GSIS will not be enough, I’ve seen elderly people receiving only 2000 Pesos, this is not enough.

So set a goal, plan for your short term and specially for long term.

Wants and needs

To simplify this, Wants are the things that if we do not buy, we will still live, alive and kicking. Needs on the other hand are things if we do not buy, we can kiss the world goodbye! XD

Needs are the things that we need to survive each day as we live, while wants are the things that we can live without.

I had this experience where I went to a mall, saw this beautiful Sony Xperia phone, I truly, truly want to have it, I was very tempted but I had to ask myself, “If I don’t buy this, will I die?”. With that question, I walked away. Anyway my phone is still working, it may not be touch screen but still working.

I know that these descriptions are just too harsh but hey, If you really want to be financially stable in the future, you have to discipline yourself, which is our 3rd step.

Discipline

The hardest part of saving. We are always tempted to buy this and that, I was like that before and what really helped me save money was knowing how the mutual funds work and the needs and wants.

Everytime I get into a situation where I am tempted to buy something that I do not need, I just pop the question above and eventually, I’ll walk away. Harsh but I know it is for my own good.

Another reason I do this is because I do not want to have regrets in my life, so it’s either regrets or discipline. When I become old, I don’t wanna say “hey, I should have saved when I was young.”. And to achieve that, discipline is the answer. Avoid regrets, do what is right. Start saving for the future.

Happy saving!

Cheers!

All credit goes to!BaniTehCat for the picture from http://browse.deviantart.com/art/Taileh-be-thinking-252010967.