26 Mar The Art of Saving: The Act itself
Without discipline, we are nothing; we literally become zombies at the mercy of urges and yearnings. Discipline is a virtue that cuts across all spheres of life and is invaluable in managing and maintaining our finances with the key essence of this being saving.
After deciding on the financial institution we would put aside our money with, it becomes pertinent to determine the portion of our money we would be putting into it and how we would go about doing so.
Here are a few points to keep in mind.
Quota: There is a ten point quote attributed to Warren Buffet regarding the art of saving that has been making rounds for years and a key point that made a lasting impression on me is that which reads “Save first then spend the rest”. This may seem a bit philosophical and impossible but on simple scrutiny, it is actually clear and most realistic. We all have a fair idea of our needed expenses and no matter how crushing they may seem at times, we all know there is always a portion to save (else, how are we still alive?).
Frequency: Doing a good thing repetitively makes it a habit. Saving is a habit; one that takes lots of discipline. After determining the quota you would like to save, you must determine how often you would like to save, keeping in mind, convenience, expenses to and fro the bank, bank charges, etc. AMP’s advice to you is to save as often as you earn i.e., if you earn daily, save daily and if you earn monthly, save monthly. With modern day banking, most of the factors we pointed out for consideration have been eliminated with the advent of the smartphone. One usually has her money paid directly to her account and even if that doesn’t happen, most mobile banking and money transaction mediums are now fused thus eliminating loss of time and inconvenience.
Withdrawing: The essence of saving is primarily to create a reserve. One that we can fall on for desired projects or in times of emergency or need with key emphasis on the latter word being a subjective one. AMP will thus aid you in pinpointing exactly what these needs are so you don’t go withdrawing at every whims and caprice.
In this era of our wages being dominantly paid into our bank accounts, thus aiding us practise point 1, it is imperative we list out these basic expenses- rent, utility and transportation and find a way which we can pay for these directly via our account. For needs such as food and clothing, it is best to select specific shopping days every week to go get these; this will thus reduce the expenditure to just four days a month.
One key thing normally ignored is the auxiliary bank charges. It is key to note that most banks charge for ATM transactions whether we use them or not and they have limits which when exceeded would incur more charges. Since our aim for saving is to reserve and gain profit whilst doing so, it would be folly to get what you have saved reduced even when you don’t “touch” it. In a nutshell, one most do everything to limit the burden of expenditure on our bank account.
All these points are to be effected in tandem and at the your own convenience . The keyword is discipline but one must be aware that balance is everything and one must not be too hard on herself that discipline becomes parsimony.