Pay yourself first:
8 QUICK-AND-PAINLESS MONEY SAVING TIPS

October 15, 2020 | by HC Mutual

You don’t have to see the whole staircase, just take the first step.

– Martin Luther King, Jr.

We all have goals and dreams for the future. It may be the latest new gadget, getting another degree, travelling, starting a business, or owning a house. Whatever it may be, more often than not, it requires money. But if you’re the average earning adult, the numbers may seem impossible next to your list of expenses. As a result, we may prematurely park these goals for “when we’re ready” or sigh them off as daydreams.

It matters that you want to start working towards your goals—so here are some tips to push you forward and help you save in a smart, doable, and efficient way!

1. Track your spending

The first step to finding out how you can save is knowing how you spend. Whether it’s a monthly bill, an online purchase, or even a tip to your delivery guy, record it. Do this religiously for at least a month. Understanding your expenses in detail is the key to controlling it.

Once you have the data, organize it by categories (e.g. utilities, groceries, subscriptions, etc). Check your bills and statements to make sure your records are accurate. Thankfully, there are now spending tracker apps that can help you do this seemingly cumbersome task.

2. Make savings part of your budget

In the words of Warren Buffet: Spend what is left after saving. Once you have an idea of how much you spend monthly, allocate your monthly income and add savings as a budget category. Make it a goal to put 10-15% of your income under it.

3. Look for where you can cut down

If your expenses are too high and you can’t reach your monthly savings goal, it’s time to look at areas where you can cut back. Start with identifying nonessentials: Internet, telco, or cable too high? Time to look at downgrade options. Do you need both Youtube and Spotify? Perhaps you can order less and cook more?

SAVING TIP

When you feel like buying something nonessential, give yourself time to cool down. Wait a few days and see if you can live without it or if you are ready to save up for it.

4. Set a savings target

One proven motivation technique is to know exactly what you want to get in the end. It should be something concrete so you always know how well you’re doing. For instance, if you want a car, find out how much money you’ll need to buy one. Armed with your budget, you can now figure out how much you’ll have to save monthly, how long it will take you, and if you want to adjust your spending to get there earlier.

SAVING TIP

Your goal doesn’t always have to be big. It can be a small, short-term goal like a new bike or phone. Succeeding will give you a feeling of reward and accomplishment, and makes you more confident to set bigger and bigger goals.

5. Prioritize your goals

Don’t forget your long-term goals, and make sure you’re not putting off important things (like retirement) for shorter term needs and wants. Allocate your savings so it is balanced between immediate rewards and long-term security.

6. Use the right tools for saving

Consider a mix of options for your short-term and long-term goals. For short-term, you can use your savings account or open a time deposit. For longer term goals, consider retirement insurance or securities such as stocks or mutual funds. There are banks that offer investment accounts with higher interest rates. There are life insurance plans where you’re insured for a set period and get a lump sum when it matures. There are also financial institutions like HC Mutual which offer a combination of these features.

As you do your research, take note of details like balance minimums, fees, and interest rates to find the best mix and fit for you.

SAVINGS TIP: For those who want to save for longer-term goals but have smaller starting income, HC Mutual offers the KayaMo Saver’s Plan:

  • Choose a savings plan that fits your needs and goals within fixed terms of 3, 5, or 7 years
  • Depending on your plan, you can earn bigger premiums by the time your savings mature
  • Auto-debit arrangements or automatic payroll deduction schemes are available to make saving easier and more regular
LEARN MORE

7. Automate your saving

Setting up automated savings reduces the chances of spending that money instead of saving it. For example, if you’re using a bank, you can open a separate (sacred) savings account and set up automatic monthly transfers from your payroll account. HC Mutual deducts your savings directly from your payroll to make saving easier for you.

8. Check your progress regularly

Review your budget monthly and see how your savings grow! Not only will it motivate you, it will also help you identify and fix any problems that may come up. Who knows, it may even inspire you to find more ways to reach your goals faster.

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