How to Reach Your Financial Goals with a New Savings Regime
11 May 2015
Posted in: Getting Married
In terms of setting long-term financial goals and saving, instant gratification is more attractive to many people. If you have a long list of things you absolutely have to have but also a whole host of reasons why you can’t save for these, you’re by no means on your own.
AIB brings you a few handy tips to break a few of the saving myths and get you on the road to a better savings strategy today.
My incomes too low to save
Just because you have a low income doesn’t mean you can’t save. In fact, there are many people on high incomes who do not save at all, while their lower paid counterparts manage to tuck a nice bit away each month. If not earning a high income is your reason for not saving, begin with a low amount such as 2% to 5% of your income each month and gradually increase this until it is around 10%.
When your incomes do go up, from perhaps a new job or raise, a good trick is to maintain your expenses at the same level and increase your savings in line with the percentage you had set before. For example, if your take home pay increases by 15%, keep your saving level at 20% of your overall income level if this is what you had been saving before.
I can’t cut any expenses from my monthly budget
We all like to have financial freedom and can find it really tricky to pick items to be cut from our monthly budget. No one likes to feel like they have to restrict themselves from this freedom so while everybody knows they should be putting something away each month, not everybody does.
A good strategy here is to start with small changes such as cutting down on having lunch out and buying unhealthy food as snacks. Make a list of items you really want and don’t buy things that aren’t on this list. There are also a few big items which you should limit how often you buy including hanging your car and buying property.
Dealing with finances isn’t really my ‘thing’
Discussing your saving strategy with your peers and friends can help both in terms of motivating yourself and getting new ideas on where you can supercharge your savings plan. Bounce ideas off each other and you’ll be doubly committed to sticking to your plan when your friends are there to informally hold you accountable.
I don’t have the time
Meeting resistance from yourself is to be expected when starting a new savings regime. Try not to be put off by this and see it as a sign that you’re going in the right direction by challenging yourself and pushing yourself beyond your usual comfort zone.
Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland.