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Saving money is one of the best debt prevention strategies available. A healthy savings account can cover unforeseen expenses and settle debts. It is therefore essential to know how to save money and below will follow some hints on saving money:
- Create a goal amount to save towards. This way even if there is a substantial amount available in the saving account, it will not be a temptation to spend it as the goal has not yet been reached. It is a great motivator to save instead of spend.
- Work out how much you can save each month, and set that amount aside the moment you receive your salary. As soon as it leaves your account and becomes part of your savings it is no longer a temptation. It does not matter how big or small the amount is, as long as you develop a healthy habit of saving.
- Start cutting back on expenses. This may mean dining out less or perhaps switching to cheaper grocery brands. Each small change can result in a dramatic reduction in expenses, and this reduction can go toward your savings.
- Leave your credit card at home. If you cannot afford it with the money on you, you don’t need it right now.
- As soon as you have settled a debt start putting the amount that would normally go toward that debt payment into your savings. After all you’ve been living without that money for as long as the debt has been paid, why not start making it work for you in a high interest bearing savings account?
- And lastly pay of your debts as soon as possible, the sooner you settle, the more you end up saving.
By being wise and having the foresight to put away money from day one, consumers can save money and avoid debt trouble.
Article written by: Andrea van Tonder 06-2013