Saving money is important to wealth generation and in our journey to financial freedom. If you want to achieve financial freedom, then you must decide to start saving money NOW while you are still actively working and and have the capacity to make money, and not LATER. I know it is not always easy to save money on a regular and consistent manner because of so many bills and expenses we need to take care of, unless we consider savings as an expense.
Right Definition of Savings
One important tool to use to save money is to develop a budget that incorporates automatic saving plan. Most of us define savings this way: Savings = Income less Expenses. This means all our money or income goes first to other people. We pay other people first by spending our money for our living and other expenses like home amortization, credit card payments (a very expensive debt), entertainment, and all other types of living expenses. With this approach, we can only save if we have money left over, which is almost always the case no money is left over to save at the end.
However, the best way to look at savings is this way: Living Expenses = Income less Savings (and Tithes and Offering, if you believe in it). Well, I do that's why I included it. In this way, you are deducting your savings from your income and paying yourself first. This is now the money you set aside for your future needs, especially when you can no longer work, or when you are temporarily out of job, or in times of other emergencies. Decide what fraction of your income you wish to save regularly to cover for your future needs. Whatever money is left after deducting your savings can now be allocated to your living expenses. It is important that you keep a list of all your living expenses and compare it with your budget to help you stay within your budget.
Saving Money Automatically
To help you develop your savings habits, first thing you need to do is to open a savings account. All banks including cooperatives offer savings account, but the bank I use and what I recommend is Bank of the Philippine Islands or BPI. The great thing about BPI is that it has wide array of savings account products you could choose from depending on your purpose and they help you to save money automatically. BPI has also a user-friendly online banking facility. At least to my experience compared with other banks.
Among the saving account products of BPI, one product that I like best and recommend for beginners is BPI Save-Up Automatic Savings. If you do find saving money regularly and consistently a bit of a challenge, you should opt for automatic savings account. This kind of savings account help you to save money the easy way. With BPI Save Up Automatic Savings, you can develop your savings habits automatically. What's even more appealing is that it's a combination of savings with life insurance coverage. All you have to do is open a BPI Save-Up Automatic Savings account with any BPI branch nearest you. It does not require an initial deposit, with a required minimum monthly balance of only P1000.00. BPI Save-Up Automatic Savings account comes with ATM card and an info card for your savings account, which is a sub-account to your savings account. Next is you need to determine the amount of money you wish to save and its frequency. You will indicate upon opening an account how often and the amount you want to save which the bank will then automatically save for you. It's automatic transfer into your savings account. You can decide to save every pay day or whatever time interval you wish. Just tell your bank and they will do it for you for FREE! You can monitor your savings as it grows through the BPI online banking facility.
Developing Saving Habits
Developing your savings habits does not happen overnight. It takes some time, but the point is, it is possible. Do not be discouraged. If you do not have much money to save and your budget is tight, that is fine. You can start small, maybe five percent or more of your income. It may not be significant and that means longer time for you to accumulate a sizable amount of savings. The point is for you to save money, even if small. The key to saving money and developing your saving habits is to do it consistently. And you can use the automatic savings account to help you on that. Once you become used to it and gain a better handle of your finances, you can gradually increase the amount you save. You can always adjust the amount of money to save save by advising your bank. Saving money will take time, what is more important is you save and save consistently.