“Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we’ve got 24 hours each.” –Christopher Rice
Being able to save 50% or more of my income is a very very important goal for me, because as I explained in a previous post, having a high savings rate is the fastest and surest way to achieve financial independence.
I would say that on average I saved about 25% last year, so essentially I am looking to now double my savings rate. Now the reason that it can be so hard to save 50% is that there are expenses like holidays that are almost never on my budget because they do not occur every month. However, this is the whole point of having an emergency savings fund, which you can dip into and replace slowly over the course of the year.
I had planned to save my emergency fund in the first half of this year – however this will be difficult because I am already a bit behind in February, then I will be travelling for work and I will have to do a little shopping also Easter is coming up and I do not want to spend it at home. Therefore my ordinary budget has to be to spend below 50% to leave some extra “room” for contingencies. This means that after Easter, I will have to “catch up” – I think those next few months should be pretty quiet months and by then maybe I can figure some creative ways to save more money.
Now I have done my budget and things are not really working out and the most realistic percentage that I can save is actually 42% and I guess that is OK considering that because business is bad, I have to pull a but more weight in the house so I have to be realistic. Now I have highlighted a few items on my budget that I have some flexibility with and maybe there will be some months that I can save in these categories also on a monthly basis I will be keeping track of how I do against my budget – hopefully these measures will enable me to save as much money as possible.
Of course with time, I should find it easier to save a higher percentage because my credit card debt will come down – right now I spend about 11% of my income paying my credit card. 42% + 11% = 53%.
Now – how do you still live fabulously and I think the answer is about being more creative, doing allot more things yourself and being careful how you spend so that each penny goes a long way. The concept of minimalism and being more careful about what I buy has really helped me to stop buying useless things. My top tips on how you can still live fabulously are:
- Plan your meals and avoid buying food that will not be consumed
- When buying food, avoid buying too many items and too much variety, stick to fewer staple products
- See what you can make or do for yourself – for example I make my own artwork and I want to teach myself photography.
- Plan your entire wardrobe and buy clothing according to what you need, instead of because you like this item – plan your wardrobe in a holistic way
- Know your style and have a “uniform” when it comes to your dressing, this will simplify your life and avoid decision fatigue. You will look amazing for as little money as possible
Happy savings and investing!
fantastic tips i would look to put them into practical. thank you for the informative piece.
Their is nothing that can be as hard as trying to save but the golden rule should always be discipline. Always pay yourself first before starting to spend i.e. once you receive a paycheck first set aside savings before starting to spend on anything else.