How To Create A Savings Plan That Works
5 mins read
2 mths ago
Sometimes it is hard to manage our financial resources well and at the same time achieve our financial objectives. Creating a saving plan that works is the only way you can keep track of your expenses, cut off unnecessary expenditures, and achieve your financial goals. Today savings can be done with your local currency and even cryptocurrency.
Cryptocurrencies have gained more market adoption and is one of the ways you can increase your finances and, at the same time, keep it safe from currency devaluation. Including store of value cryptocurrencies such as bitcoin and tether (USDT) while creating a savings plan will enable you to have a well-diversified portfolio.
What Is a Savings Plan?
A savings plan is a process of creating a roadmap on how to improve and achieve your financial objectives. Creating a saving plan that works, only means one thing, which is that your financial resources and objectives will not be wasted.
In this modern age, creating a savings plan has gone beyond saving your money in the bank and keeping away from unnecessary expenses. Despite the importance of these methods, the addition of saving with cryptocurrency will make sure that you have numerous options available.
A simple savings plan should include your financial goals and how you are going to achieve them. Talking about financial goals, this may include your educational goals, career development plans, vacation plans, emergency funds, and other projects. Getting on this journey and finding value with it begins with financial literacy and is highly commendable.
How To Create a Savings Plan
Having the necessary knowledge before creating a savings plan is important if you want your goals to be accomplished. These are what to have in mind while creating a savings plan.
- Record Your Expenses:
Creating a personal savings plan without knowing how much you spend in a day, week or month will only lead to a roadblock. Make out time to track your day-to-day expenses which may include how much you spend on coffee, fuel, household items, groceries, and other things you spend your finances on regularly. Knowing how much you spend will help you to create a savings plan chart.
- Cut Unnecessary Expenses:
After recording your spending habits, cutting down on unnecessary expenses you may have been making such as recurring subscriptions to apps you seldom use or need could go a long way.
These could include expensive car rides, cooking your meals rather than eating out, cancelling memberships or subscriptions you don't make use of, and looking out for quality services with low prices.
A final and very important financial practice will be to avoid purchasing anything on impulse. Rather, take your time to check if what you want to buy is necessary.
- Set Financial Goals:
Financial goals will help you to have in mind that there is something that you need to achieve. This will help you to be conscious of how and what you spend your money on. Your personal saving plan should include financial objectives that you look forward to achieving. When setting these goals, it should include short-term goals and long-term goals. For instance, your long-term goal can be to save up to $100,000 worth of bitcoin or ethereum in five years depending on capacity, while a short-term goal may be to save $100worth of bitcoin every week.
- Make Out Your Financial Priorities:
Making out your financial priorities will help you not to spend unnecessarily. Let's assume you want to build a house in three years and we believe the best for you. You can start putting in small chunks of money for it. Setting your financial priorities will help you know what you are to spend on and what you should forgo. It also will help in the proper distribution of your savings among your financial goals.
- Make Automatic Savings:
Making automatic savings is one of the sure ways not to give second thoughts to the money you are supposed to save. You can ask your bank officer to direct all your paycheck or some proportion of it to your savings account. As another great alternative, you can create a crypto wallet and save a percentage of your income into crypto.
- Financial Due Diligence:
If you must preserve wealth, learning to preserve it is equally important. According to a report, one of the ways people waste money is by spending on anything they want. This is not best practice as you ought to have a series of questions you ask alongside your financial plans before making excessive purchases. Due diligence is also needed when you want to invest in other people's projects. This is to avoid getting into Ponzi And Pyramid Schemes.
How To Save With Cryptocurrencies
Due to the number of people going into the cryptocurrency industry in Africa today, saving money with cryptocurrency has become possible and can be one of the best ways to save your money. Cryptocurrencies like bitcoin, and tether (USDT) are among the best options when saving your money with cryptocurrency.
The future is moving steadily into the virtual currency era, with countries like El Salvador accepting bitcoin as a legal tender and multiple African countries like Nigeria, Ghana creating their CBDCs.
Whether you're a beginner in the crypto space or not, below is a simple step by step guide on how to start your journey saving with cryptocurrencies.
- Join a Crypto Exchange:
Cryptocurrencies that are considered "store of value" such as bitcoin, and tether do not have their official exchange. As a result, you can buy and sell them by signing up on a safe exchange like Yellow Card.
- Get a Crypto Wallet:
Once you have signed up for a free account on Yellow Card, you automatically get a wallet called a hot wallet. Hot wallets are those in exchanges which can be accessed with apps on your phone. There are cold wallet options too that require saving your crypto on wallets like Nano, Ledger, and Trezor. A cold wallet is similar to a flash drive and is an extra layer of security.
- Completing Your KYC:
Doing your KYC is the next important step as you sign up on any platform including Yellow Card. KYC simply means "Know Your Customer" and completing it helps the platform give you full access to all of its product features.
It also tells the system that you're a loyal customer willing to follow due process. You can find out all about KYC here.
- Purchase Crypto Peer-To-Peer or Directly From Your Bank Account:
In some African countries today, the local banks do not aid the buying and selling of cryptocurrencies with your debit or credit card. So the easiest and safest way you can purchase crypto is through the Peer-To-Peer method on Yellow Card. This transaction is carried out on the crypto exchange and it involves two parties (the buyer and the seller) with the exchange acting as an escrow.
- Diversify Your Crypto Portfolio:
One of the proven ways to save your money and invest is by diversifying owning a crypto portfolio. While saving your money with cryptocurrency, it is better to do so with a store of value cryptocurrencies like bitcoin or tether. A store of value is a cryptocurrency that you can save without worrying about losing its value, unlike local currencies. Cryptocurrencies such as bitcoin, tether (USDT), are excellent examples of cryptocurrencies you can save start with today.
Creating a savings plan that works is important if you don't want to suffer a massive financial crisis. It is simpler to tell someone to create a saving plan than for them to create one that works. Picking out your expenses, curtailing those expenses, creating a savings plan chart, and setting achievable financial goals, are some of the ways of creating a savings plan that works. Integrating cryptocurrencies such as tether, and bitcoin into your savings plan will help your finances not to suffer much loss in case of any global economic crisis.
Disclaimer: This article is meant to provide general guidance and understanding of cryptocurrency and the Blockchain network. It’s not an exhaustive list and should not be taken as financial advice. Yellow Card Academy is not responsible for your investment decisions.