How to Save Without Going Broke

Financial independence is something we all desire, that is, the ability to afford our basic necessities without going into debt. But it may be quite challenging to achieve because our earnings are often directed at multiple needs, with miscellaneous expenses creeping up at intervals. And while we are still struggling to meet all our needs, we are advised to still save a portion of our earnings for the "rainy days". 😅

One of the purposes of Yellow Card Academy is to help more people find a way to navigate these challenges and attain financial freedom. So, here we will discuss how to save without breaking your pocket.

Savings is the amount of money set aside from a person's earning after the expenses have been removed. Savings is set aside for future expenses and can be used to generate wealth through investments.

Saving might seem like a difficult task, especially when we have to deal with so many expenses. It might also seem impossible to save without going broke or worse, ending up in debts. However, with the right information, anyone can cultivate a saving habit. Here are useful steps we’ve put together to help you.

The first step to saving is to calculate your net worth. You may be thinking, "Why do I have to calculate my net worth when I’m not Elon Musk? Calculating your net worth allows you to know your financial standing and properly plan for your expenses, investments, and in this case, savings.

What is your net worth?

Your net worth refers to all the assets you own minus your debts (liabilities).

How do you calculate your net worth?

Calculating your network is quite straightforward. However, you may need to dedicate a bit of time to calculate your net worth. You can calculate your net worth in these basic steps:

Now that you know your financial standing, the next step is to make a list of your recurring expenses. These are things like gas bills, electricity bills, groceries, stationery, and toiletries. It would help if you outlined your expenses to determine how much you spend weekly or monthly. Yes, it may be difficult with the prices of things always changing but the plan here is to have a reasonable idea of how much you spend on these things periodically.

You should also outline your debts here and note your repayment plan. It is difficult to attain financial independence or save when you have your debts dragging you back.

After you have outlined your expenses, you need to set them in order of scale of preference. That is, you need to arrange them in other of importance. This would help you outline your needs and wants to determine what you need to spend your money on. You would be able to recognise your priorities, such as your rent, debts, and wants that might have been taking a significant amount of your money.

With your expenses listed out and prioritised, you should notice some areas where you can cut off some costs and save some extra cash. For instance, you may be able to save some money from the petrol bills by walking short distances without having to take your car.

You might also save a few pennies by reducing the amount of soda or beer you consume in a month. Electricity bills can also be saved by switching off gadgets when they are no longer in use. You might also consider saving money by changing your cable services. Is it possible to get on the family plan with your siblings for Spotify or Netflix?

It may not seem like much, but little drops of water make an ocean. You would be able to save costs and channel the extra money into your savings.

The next step now that you have optimised your expenses and seen how much money you have left is to set up a saving plan.

Now, this gets a bit tricky.

The current state of the economy makes savings unattractive for many because the interest gained in your savings is almost insignificant in comparison to the value of your money. Apart from inflation, in traditional savings accounts, we often have to pay maintenance fees to the bank, which, although might seem insignificant at first, would sum up to a noticeable amount. Imagine after going through the stress of cutting back on your expenses so that you can save towards a goal or for your future, then a bank just withdraws from it at will, ugh!

Don’t be discouraged, it’s not all that bad. Traditional savings offer a degree of confidence to many, that a reputable institution is the custodian of their money. So they accept the maintenance charges. Also, it is easy to withdraw from these savings accounts in case of an emergency

However, those are not the only options now. Modern savings accounts offer better interests rates and for those who really need it, a stricter withdrawal process. In this category, we have PiggyVest, CowryWise and Alat.

A third option is to lock your savings in investment till you need it. Through investment, you let your savings earn you some extra funds while you focus on other things. However, be cautious when investing so that you don't encounter a loss that might cost you your entire savings. 

It is good practice to investigate before investing your money into any investment platform. You may choose to buy stocks in a firm, invest in real estate by purchasing a property. You may also decide to invest in cryptocurrency; In a situation where you have enough money, you can even split it between these options.

Once you’ve decided, you can then put your money in this savings account and ensure you put your savings into it as per your saving plan.

Here are some tips to help you save properly and also, make the most of it.

Implementing these strategies, among many others, would help you get on track with a healthy saving habit.  Saving is a habit, one that, if fully adopted, would help you attain your goals of financial freedom. With these strategies, you would find it easy to save a substantial amount of money every month without going broke. Finally, don’t forget to take it easy on yourself. Reward yourself in the present and don’t put everything off to the future.