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It’s something that we will all undergo at some point. Some people feel like they are undergoing tough financial times all of the time. And while approaches like frugality can certainly ensure that you are saving more money, what are the key things to remember when you are attempting to save money during any tough time so you can still climb that financial mountain?
Understand How Much Money You Really Have
The best place to begin is to understand how much money is actually in your bank account and in your pocket. If you are undergoing a tough time like a divorce or separation, the fact is that you may find that due to spousal support laws you are having to pay more than you can realistically afford. This is why you’ve got to understand how much money is truly in your bank account. When you understand what you are in possession of, you can make far better financial decisions.
Consider Professional Advice
It’s about making sure that we make the most of what we’ve got, no matter how little it is. Professional advice, whether it’s from a financial advisor or a friend that is pretty savvy when it comes to savings, can make a big difference. If you are struggling to put money aside, sometimes a different perspective can make a big difference because it gives you a better insight into how you could save that money better. It could be the case that you have too much debt, in which case paying off debt with the right tools can help you.
Set a Budget
It is amazing how many people don’t have a budget. Going back to the first point, when you understand how much money you really have, you can budget accordingly. The biggest problem many people have is when they don’t check their bank accounts on a regular basis. Some people make the mistake of thinking their budget is X amount when in reality, there are a lot more hidden costs, whether it’s paying for things with a credit card and then having to pay that card off at a later date. When you set a budget, it’s got to cover every aspect of your outgoings including credit cards.
Start Saving Little Amounts
The best thing we can all do is to start saving minuscule amounts that we don’t even notice it. There are fantastic money-saving apps out there that can help you save a few cents, and it’s important to remember that these things will add up over time. One of the biggest problems people have is thinking that a small amount actually doesn’t amount to anything. When you start saving these little amounts, you can have a better understanding of how far a few cents can really go. A lot of people believe that there is no point in saving a few pennies here and there, but you’ve got to think about accumulation.
Be Transparent
Transparency is so important, whether it’s in terms of your own finances in a relationship or even if you’re going through the divorce process. You might be one of those people that thinks about hiding your assets but if you want to save money, it’s not a good idea to start hiding things. When tough times descend upon us, this is when we have to be open and honest. This is especially true in terms of investing. If you are considering investing during this time, you have to build up a decent amount of money in your pot(s). And this means that if you invest in something that goes belly up, as heartbreaking as it can be, ensuring that you have financial transparency is far more effective.
Set Up Distinct Funds
If you really want to keep track of your finances, the best thing you can do is to set up a variety of different pots. The best thing you can do is to establish your priorities. Something like the 50/30/20 rule is very beneficial here. Setting aside 50% for the things you need, 30% for the things you want, and 20% as savings is a great way for you to start pushing in the right direction. It all depends on what your goals are. If you are looking to save for a vacation, the best thing you can do is to set up an account that is hard to access so you don’t take the money out when you think you need to pay off something. Likewise, an account that is purely for paying off debt can be very useful because you won’t dig into that for anything else. When you start to set up very distinct funds, you have a better understanding of what you really want to achieve, but you can also have a clearer perspective of your financial goals. The problem most of us have is we have one account or, potentially, a joint account with a partner. It might benefit you to have a number of separate bank accounts, which could mean that you don’t give into your bank account so easily. Saving money is as much about discipline as it is about the money you save.
Keep at It!
Saving is a very tough task right now, and there are things that we should all attempt to ensure that we are saving properly. You could cut back on your lifestyle by opting for different types of food, or not using the car as much if possible, and the fact is that the hardest part about saving is actually starting it. If you are considering saving, it’s always about keeping that goal in your mind. There will be times when it becomes more difficult, and this is why we have to learn how to keep at it. Some people believe that saving money is impossible during times like this, but even if you end up saving a few pennies, this is better than nothing. Tough times are there to challenge us, and rather than avoiding challenges and every part of our lives, we could embrace the challenge.
