Written by: David Keth ▕ August 2019









How much money do you save?

keep reading to learn the best kept secrets of saving!





In a world that promulgates consumption, we are faced with difficult decisions each day; spend and savor or save and sacrifice. Suffering shouldn't be synonymous with saving, but we live in times where disposable income has been stretched to its limit.- Forcing people to be dependent on credit. Here are simple strategies that could help boost your disposable income and increase your savings.





Here are the best kept secrets:









1. Make a budget





Making a budget gives us the ability to be committed to what we only need to buy.

At the start of the month write down what it is that you need and then stick to it, make sure to be diligent. Pay off all the necessities first, such as rent, electricity, and debt. Money that remains should be allocated accordingly. Allocate money to entertainment, emergencies and savings. Making this a habit will give you control over your finances.









2. Tax yourself





This is probably my favourite strategy that I have used over the years. Every time you buy an item tax yourself a certain percentage, I usually go with a rate of 10%. Not only will you save money, but this will allow you to remain conscious when it comes to purchasing things. If you really want/need it you will tax yourself. If the government can use it as a tool to increase revenue, so can you!









3. Record what you spend your money on





This may seem futile and counter-intuitive, but believe me it works. Every time you make a purchase record what you spent it on,this will allow you to save money the following month. Eventually, it will become a game where you compete against yourself to spend less the next month. Recording what you spend money on gives power back to you, you will discover where you spend unnecessary money and where you can save. It takes about three months before you can really see where you are going right or wrong. I can't express this enough; if you don't know where your money is going to, then how on earth are you going to save? Keep track of your finances as if it were a business.













4. Consolidate debt





Take a more proactive role and stay up to date with your current financial situation.

Consolidating debt can be a good way forward if you have excess debt. Are you tired of feeling pressure and getting numerous calls from debt collectors, then

move all your debt to one financial provider, and renegotiate the terms. This will help you keep track of your debt and will help you save money in the long run. Taking action now will alleviate the emotional burden of paying off numerous financial providers- it is all psychological.





5. Write a list before you go shopping





Aimlessly walking around the supermarket and making impromptu decisions is a catalyst for over spending. Do yourself a favour and make a list of what you need before you go, and when you are there be sure to stick to it.









6. Cancel unused memberships





Your new years resolution was to go to the gym more, but you still haven't been! Then it's time to come to terms with it, cancel it! not only is it a drain on your will power, but it's a drain on your pocket too. If you are not going then don't continue to pay for something you don't utilize.- This can be said for all things in your life.









7. Prepare meals at home





Although this isn't always easy, it can be beneficial for your pocket. Not only does it extend your disposable income, but you will be in control of what you put in your body. Try make it a family thing, take turns to prepare food, if you get lazy and bored you will not want to do it. -so keep it fun and entertaining. We live in a world where convenience has become the norm. So what if you worked late? so what if you are tired? Prepare your own food and you will feel the financial benefits.









8. Visual reminder of debt





Make your debt visual, just like you need to see your goals for it to become a reality, making your debt visual will remind you to be conscious of your spending habits. It will encourage you to be frugal with what you have, and allow you to live within your means. Seeing is believing, coming to terms that you have debt is the first stage in become prosperous.









9. Carpool





Carpooling is a term used for when people share transport, people ride together. If you and your colleague live in the same area and work in the same area then it makes sense to drive together.- don't be foolish, small sacrifices lead to big rewards!





10. Buy reliable 2nd hand cars





Unless you utilize it to make money, buying a car is the worst possible investment. Most of the time it is a complete waste of capital and a financial headache for owners. Think about it, tires, possible breakdowns, maintenance, and petrol- it just doesn't seem viable. In more developing countries, maybe having a car then is viable, but still, carpooling and a bicycle can get you to where you need to be too. Remember, small sacrifices lead to big rewards! If you must have a car, make sure to source and buy a reliable second hand car, buying a car that is going to give you endless problems is just not worth the stress or the financial pain.









11. Use public transport





To reiterate my last point, buying a car is a waste of time if the public transport system is safe and reliable. Public transport does not mean you are poor, don't live in a perception of what you think other's think of you, you do you and rewards will follow. Why pay something off over 5 years and spend thousands of Dollars paying off a depreciating asset, when you can utilize public transport and invest the difference. Think smart and make smart decisions, short term pain always seems worse until the rewards start filtering in. As Israelmore Ayivor states; "Be willing to pass through a short term pain so that you can come out with a long term gain."

Be willing to pass through a short term pain so that you can come out with a long term gain.

12. Cut your own hair





This may seem stupid, but cutting your own hair can save you hundreds of Dollars in the long run. If this is not for you, I completely understand. But in all honesty, I would rather have a botched haircut then be drowning in debt.-to each his own.









13. Think before purchasing





Many times our impulsive personality's screams with desire, "we need this, we need that, I want this,and I want that". - hush those calls and occupy your mind with other thoughts. If you have a desire to buy something, wait 24 hours. And if you still want it, then wait another week! And after all that; if you still want it, then go buy it.- just don't forget to tax yourself!









14. Don't take out contracts





Although contracts allow you to satisfy your desire for instant gratification- Just don't! Contracts give you a false sense of wealth! If you are not good with money management, then you will be heading down the wrong path. JUST DON'T DO IT!





It's simple, If you cannot afford it with cash, then don't buy it!









15. Don't keep up with the Jones's





Trying to satisfy the perception other's have of you can be draining on the budget. The first step in making your money last is to be comfortable with who you are and what you have. Our time here is not infinite, so spending it competing with your neighbours is just not worth the emotional and financial heart ache. Keep up with yourself, be better than who you were yesterday, and remember; money does not determine your value.













Most of us already struggle with debt, and while it may seem paying off debt is the correct and most important thing to do, I disagree! Resorting to debt should be the last thing we do, albeit at times it is unavoidable. It is of utmost importance to limit your debt, in fact, eradicate it if possible.





There are two distinct methods that one can utilize in paying down debt:





1. In the debt avalanche method, you pay extra money towards the one debt with the highest interest rate. - benefiting your pocket in the long run.





2. With the debt snowball method, you pay the smallest debt amount first and work your way up, regardless of interest rate.





Both make significant impact in reducing your overall debt burden, however, each method will yield different results for each personality type.

In the former method, paying down the highest interest rate first acts as a catalyst to saving more money, however, you may become despondent as seeing results takes longer.

In the latter method, paying the smallest debt amount first leads to a psychological sense of achievement, where the payer sees tangible results, keeping them energized and dedicated to paying off their debt, however, this method does not capitalize savings. - it is more of a psychological method to trick the brain into staying committed.





Debt can be frustrating but it should be managed and controlled in a responsible manner.









17. Build up an emergency fund.





It is important to build up a lump sum of your own money, an emergency fund, to cushion you from any unexpected financial blows. We need to be our own insurance policies.

Building up an emergency fund stops you from tapping into credit, thus reducing your debt burden and credit reliance. An emergency fund will literally make you feel safer and eliminate many restless nights from your routine.





An emergency fund will make you courageous. What I mean by this is you will be more inclined to take on risk, and I don't mean spending money on risky stocks, but giving you the freedom to make smart decisions. For example, transitioning from one job to the next can be quite daunting and intimidating, most of the time we are scared to give up what we know for the unknown,this is because we are worried about money! But having an emergency fund creates a state of calmness. There is something majestic and empowering about knowing; that you can pay yourself your current salary for the next year. This sense of release not only brings clarity but allows you to make rational decisions.





I would recommend building up an emergency fund of at least one year's salary, although, many financial experts would recommend only 3-6 months worth, but in the times we are living I would suggest 12 months.









18. Buy second hand goods





Buying second hand goods is a superb way to save money, another man's trash is another man's savings. Never be embarrassed about owning second hand goods, we all start somewhere. On this point, you can check out my blog about business ideas by clicking here.

Buying quality second hand goods can save you a fortune. And in the words of Walter Slezak;

"We Spend money we don't have for things we don't need to impress people we don't like"









19.Find a roommate





Subletting is a good way to help boost your disposable income, it can also boost your savings. If you have a bond and don't utilize one of the rooms then consider subletting the room to someone you trust. Not only will this help you pay your bond off, but you will be using someone else's money to pay for your debt. You could scale this idea too; buying a home with three bedrooms and subletting the other two bedrooms out to trustworthy tenants, this strategy could end up paying 3/4 of your bond off.- this is how you create passive income. Although this sounds good in theory, you need to take precautions against a number of parameters, such as; having sufficient liquidity to service your debt in case you cant find subtenants.- Always have a mitigation plan!









20. Set savings goals





Last but not least, set yourself goals, we all want to save, but what are we saving for? With a clear and definite plan a person will most likely stay the full course for their savings plan. If we know what we are saving for then monitoring our spending becomes easier. Set yourself realistic financial goals and then reward yourself along the way.- it is important to enjoy the journey too.





An example of a financial goal could be:

Saving for your child's education.

Saving up for a holiday.

Building up an emergency fund.

Saving up for a deposit on your dream home.

All these financial goals need strict discipline, you cant simply say I am saving for a house, you need a step by step plan to ensure that you stay committed.

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These 20 tips are a way to maximize your savings potential. I understand that not all the ideas mentioned will be viable or even suitable for you to implement, but I would like to encourage you to commit to at least 5 of them, start small and work your way through the list, use the ones that are applicable to you and your financial situation. Like the great Benjamin Franklin once said, “If you fail to plan, you are planning to fail.”





#savings ▏#financialgoals ▏#moneymanagement

@KethGuru



