HOW TO CREATE SAVINGS

Have you been working for a long time now?

How much did you save so far?

Or does your bank account usually run out of money even before you receive your monthly salary.

We usually set as one of our goals if not number one, is to have savings once we landed on our first job. It is a job well done if we are able to attain that goal and we can see that our savings is constantly growing.

However there are some who wish that they can start to have savings, but they always come short of finances month after month and they even find themselves in debt.

If we continue to aspire to have savings, the most probable result is we won’t have savings. However if we start to create savings, then we can have savings. Savings needs to be created not by other people but by ourselves.
You can create savings, no matter how small or big is your monthly income.
How then are you going to create savings?

The first step in creating saving is to get out of debt, just in case you are in debt right now. You have to pay all of your debt first and once you are out of debt then you are ready to create savings.

Let’s assume that you are now out of debt and you just receive your monthly income.
Divide your income into six portions.

10% of your income goes to your tithe. If you don’t believe in tithing then you have the option of giving that 10% to the needy. There are a lot of people who beg for food or you can choose to donate to the orphanage. You can also donate to foundations or home for the aged. Or you can give it as a donation in times of calamity. The choice is yours.

50% of your income goes to your monthly expenses. This monthly expenses is your budget for food, clothing, bills, transportation and the like.

10% of your income goes to emergency fund. This fund is to be used in case someone gets sick or hospitalized or you suddenly loss your job. An ideal emergency fund is equivalent to the total amount of your six month salary. So keep on funding this emergency fund until you reach that amount. Once you reach that amount you can add the succeeding 10% to your monthly expenses to make it 60%. Or if you can live extravagant with 50% of your income then you can move it to another item such as in savings or in investment.

10% of your income goes to support fund. This fund is your financial support to your family members. This is applicable if you are still single. But if you are married then this support fund can be added to your monthly expenses.

10% of your income goes to your savings. You can open a time deposit account so you won’t be easily tempted to take it from the bank. Once your savings grow, you have the option to move some of this amount to your investment.

10% of your income goes to your investment. This investment will grow and will help you sustain in the future. Your investment will be your retirement fund as well.

So with this step you can start creating savings. It doesn’t matter even if it is a small amount that you can save on a monthly basis. What is important is you started to create savings and it will naturally grow.