How to Start Saving Now – Develop a Financial Plan
Written by Olubunmi Fatoki
It is not the amount you are making that determines how much you can save, but how much you can save from the amount you make. The biblical story of Joseph showed how saving 20% of the harvest for seven years was pivotal in helping the Egyptians and the surrounding nations overcome the seven years of famine in the land. “Let Pharaoh… set aside one-fifth [of the produce] of the [entire] land of Egypt in the seven years of abundance.” (Genesis 41:34 AMP). This singular act was instrumental in preserving Joseph’s father (Jacob), his brothers, and their entire clan from the famine.
You might ask, does that apply to modern-day finance? Yes, it does a great deal! We can take a cue from Joseph’s step of financial discipline.
Plan a budget.
“For which one of you, when he wants to build …, does not first sit down and calculate the cost, to see if he has enough to finish it?” (Luke 14:28 AMP).
What are your spending priorities? Before you can create a budget, it may be helpful to track your expenses for a month or two to see what your baseline is. Once you know this, you can prioritize intentional spending by setting up a budget. Be realistic and try as much as possible to stick to it. It may be challenging in the first few months, but you will get accustomed to it and, it will become a part of your daily living.
Use mobile apps to monitor your spending habits.
Download apps that help you see where you are spending most of your money. Some apps include Mint, Personal Capital, and the likes. It will guide and inform you on areas of your spending to cut costs and increase your savings. Some of these apps also help you plan a workable budget.
Set saving goals.
Set achievable goals, such as saving as little as $5 a week or 5% of your total income after tax. You can set up an automatic transfer of a fixed amount from your current to your savings account.
To maintain your saving goals, get comfortable with saying, “I can’t afford this,” or “I don’t want to split the check,” or “that is not within my budget.” You will realize that most people don’t respond as badly as you would think. Saying “no” keeps you within your budget and saving plans.
Live within your means; Be “money vigilant.”
Do not buy what you do not need. You can cut going to the coffee shop or restaurants daily. How about bringing your homemade beverages and food to school or work? Yes, that may require you to learn to cook, however, you may find it to be very fun, relaxing, and most importantly, healthy. Take a walk or bike to destinations of a shorter distance.
Don’t feel pressured by your friends. Create boundaries and gracefully turn down plans you can’t afford. True friendship is not dependent on being able to keep up financially.
Have a side gig to earn extra cash.
Get creative. Find an on-campus student job, Uber, babysit, start a photography business, walk dogs, or work at a restaurant to earn extra cash. Come on, don’t be lazy. Get going! Enjoy the full college experience.
“Go to the ant, O lazy one; Observe her ways and be wise, Which, having no chief, Overseer or ruler, she prepares her food in the summer and brings in her provisions [of food for the winter] in the harvest.” (Proverbs 6:6-8 AMP).
Manage your student loans before graduation.
Before you graduate college, speak with a financial advisor about managing your student loans. It will make it easier for you to start repaying your debt as you transition into your first professional job. It may also give you a sense of responsibility toward your financial wellbeing.
After graduation, when you land your first professional job, start looking into these areas:
- Make an automated monthly deposit into your savings account.
- Have an emergency fund for times of financial hardship.
- Prepare for taxes in due time.
- Invest in stocks. You’re essentially buying a piece of ownership into a business. Check out Stock Investing For Dummies Cheat Sheet.
- Ensure your valuables, home, and life.
- Invest beyond your 401(k)-employee retirement account.
Remember that you do not need to start making a ton of money to begin saving. Start now, and you will be on the path of building wealth for yourself and the next generation.
