6 EASY STEPS TO SAVE MONEY AS AN EMPLOYEE
Recently, I had an interaction with a
wise man and he told me a story titled “And then it is winter” .
The story was about a retired worker who could not save money as an
employee. In his advise, he said I should not procrastinate the
things I intend to do for so long because winter will come to me
sooner than I think. I learnt a lot of lessons from the story and
came up with 6 easy steps to save money as an employee.
- Make a Realistic Budget
- Downsize your debt
- See every Salary as your last
- Pay your Tithe
- Make Room for Contingency in your Budget
- Execute your budget as planed
Make a realistic Budget
The first step towards financial
discipline as an employee is to make a realistic Budget for yourself.
A budget is simply a financial plan for
a defined period of time. As an employee it includes your income for
a defined period and expenses for the same period. A good knowledge
of how much you earn in a month and how much you need to spend in the
same month will help you plan on what is really feasible to save. A
target savings that is not feasible can discourage you from making
savings regularly. Take the few steps to create your own Budget for a
month.
1 Write down your income for the month
in one side of a sheet.
2 Expenses for a month such as utility
bills, cost of feeding for the month, rent for the month, cost of
transport for the month should be written on the other side of the
sheet.
3 Subtract your expenses from your
income.
The Balance is what you can save. Which
I call Feasible Savings Amount.
If you took these steps then you
already know what your Feasible saving amount is. This will help you
plan for any other investment in the future.
Downsize your debts.
For a Salary earner, Debts can really
be difficult to get rid off. You will agree with me that it makes you
run in circle. I call this circle a Rat Race. If you already have a
Budget which your total income depends on, Payment of your debts will
reduce your income for that moth. For instance, I earn $100 per month
and I borrowed $15 from Mr John to pay at the end of the month. By
Month end, my income will be reduced to $85 . The consequence of this
is reduction in your Feasible Savings Amount. A more severe
consequence will be borrowing to meet up with your expenses for the
month. The later consequence will keep you in a rat race. Take the
following steps your to downsize your debts.
Create a feasible repayment plan which
will not destabilize funds set aside in your budget for your
expenses.
Get an extra source income to offset
the loan
Do not incur more debt by borrowing to
Offset previous debt
See every Salary as your Last
If you are asked to make a list of
things to buy with your last salary. You will agree with me that the
list will be very small to enable you have more to save or invest..
For every salary you receive pretend it is your last and you will
surely spend it only on important things.
Pay your Tithe.
I do not intend to sound
like a preacher. However, there is a reward for paying your tithe. I
can say this authoritatively because I have experienced it. It really
pays to pay your tithe. This is a formula that works for me. I think
it will work for you. Pay your tithe immediately you receive your
Salary. You will notice that most other things will fall in place as
planed in your budget.
Make Room for Contingency in your Budget
A budget without contingency
plan is not a good budget. There must always be room for unforeseen
issues that could cause you more funds. Remember your Budget is not
cast in stone. Having a contingency plan in your Budget makes it
feasible and gives you the drive to stick to your plan.
Execute your Budget as planed.
A good plan will not make
you successful, rather a good plan properly executed will make you
successful. No matter how good you budget is , if you do not execute
it you will not have a good outcome. You need to be disciplined,
focused on what you want to do and also pray that your effort will be
blessed.
As an employee we need to
save money for the rainy day. If we do not do so now, winter will
come to us sooner than we expect. Please follow these 6 easy steps to save money as an employee. For further
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