In an unpredictable world, those who live in stable economies and have a reasonable salary should be fine. Shouldn’t they? Pam (52), a management professional with a house and car loan complains bitterly that her salary is inadequate. Pam wears designer clothes, drives a sports car and goes on amazing holidays. Her sister, Joan (55) is a housewife who, along with her husband, raised two kids on a single salary. She budgeted carefully and has no serious money issues.
Nowadays, many people on high salaries are suffering economically due to their own financial mismanagement. They can buy anything they want with credit cards, but as repayments devour their disposable income, they feel dissatisfied and unfulfilled.
Savings Save The Day
Recently, Joan and her husband rewired their house, which cost them thousands of pounds. Because they had savings, they got through the crisis. Pam’s car was damaged in an accident. She was unhurt, but the extensive repairs required sent her delicately balanced finances into a spin.
There are several savings account options:
- You can set up a simple savings bank account without ATM or debit card access. Fixed-term savings accounts cannot have withdrawals for a specified period, but the interest rate is higher. You may have access to a simple savings account any time.
- Another good option is a credit union savings account. Provided you save regularly with it, it’ll help you build up a good history with the credit union and pave the way for your eligibility for a low-interest loan, while maintaining your savings balance. Once you open a credit union account, you’re a shareholder or ‘member’. This community-based non profit financial institution rewards its members with low interest rates and reasonable charges.
Motivation For Saving
Can we motivate ourselves to save? Okay! You need £2,000.00 for a holiday. You need the money by a certain date to book on time. See how much time you have and break down the amount into monthly portions. Gather the amount by cutting your daily expenses, walking instead of taking buses, re-using teabags, whatever helps.
A great way to motivate yourself to achieve a set goal is to make it as visual as possible. This will ensure you are constantly reminded, understand how far you’re your goal you are and ultimately more motivated to achieve it. You can buy nice chart paper and coloured sticky notes from most stationery companies. Make a progress chart for your kitchen wall. Add a colourful note every time you save your monthly amount.
Track your spending
Set up ATM/Debit SMS alerts or download the Monzo app on your smartphone to track your spending. Use Google/Excel sheets to record your expenditure. It’s thrilling to watch your progress.
Create Passive Income Streams
Do you have some expert knowledge or write short stories? Publish an ebook on Amazon and create passive income. Be warned.’ Passive’ income means lots of effort initially, plus marketing knowledge to promote ebooks.
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