How I Started Saving

I was clueless about saving money.

Back then I only knew about having a bank account and, because it came with an ATM card, I would spend whatever was in it. I spent my money on travel, dining out and shopping. I splurged on sales and ended up having extra pairs of clothes, shoes, bags and that I never used. To minimize clutter I either sold, gave or threw them away. Such a waste of hard-earned money.

Basically, I did not know how money will add value to my life. I had zero motivation to save for the rainy day; I spent recklessly and waited to get paid again the next month… and this went on month after month.

I had to make a firm decision to start learning how to save. I started reading blogs and spending time with people who can guide me with my journey until I came up with goals for my future – short, mid and long term.

Here are nine money-saving habits that got me started and hopefully can work for you too:

1. Pay yourself first. I would hear this advice from friends but I was never taught how to do it properly. To “reward myself” meant to me that I can devour a piece of perfectly-marbled steak, guilt-free. Later on I learned that its real meaning is to save a certain amount for my Emergency Fund (EF) or anything that my future self will thank me for. Start by setting a goal amount and saving a small amount; as a rule of thumb, it’s advisable to set aside enough money to cover your expenses for six months. While setting aside for EF, save some money for “fun fund” too for entertainment, gifts, shopping. Saving should not mean depriving yourself of the good stuff, but always making sure you don’t overspend.
2Stop spending on junk. It is so easy to get distracted in a consumer-driven world. Start by unsubscribing emails from online store sales and discount vouchers! It is not worth hoarding lotions or fragrances just because they are being sold for less, unless you’re selling them for profit; buying one for yourself should be enough to last you for some time. Same goes for hoarding clothing, accessories, even bedding and house decorations. Do you really need to have extras? There was a time when china were considered “collectibles” but now they are being sold in garage sales. Also, delay gratification by waiting a few days to decide on a purchase. If you can avoid the mall, do so!
3. Rent a flat close to work. This way you pay cheaper fare. This should also buy you an extra 5 or 10 minutes of snooze in the morning. It not only saves you money but more importantly, time. If you are lucky to find a nice place where you can walk to work, that gives you added bonus of exercise which improves physical and mental health.
4. “No Pasalubong Policy”. I hate to sound so stingy (which I am) but this is my personal preference. Instead of sending a box of soaps, clothes, chocolates or toys (which they can buy themselves anyway), I send money instead. I would save the cost of shopping (approximately AED500) and shipping (approximately AED200) and instead give it to my family as cash every now and then to at least help pay for school fees, electricity bills, fuel, groceries and other expenses. Or they can spend it on a holiday that should give them a lasting, meaningful experience. I once sent money to cover my dad’s birthday party expenses because I know how much he would love having his “amigos” over for good old grilled food and KTV. That made him happier compared to that time I sent him shirts and sneakers.
5. Save all coins. If you are a chai person like me, I am sure you want to always have coins in your purse. I keep loose change to pay for my chai and save the rest to pay for my ironing services which costs from AED1 to AED2 per top/blouse. So if I have an extra AED5, that should cover my ironing expenses for 1 week. I also use these coins for my fruit juices which cost AED8 per glass. Every AED1 makes a difference.
6. Take advantage of freebies. Identify what you can spend less on, such as entertainment and dining out. You might want to rethink about your gym membership and use the gym in your flat instead. If you are lucky and have free Nespresso at work, take advantage of that too instead of paying for coffee. Netflix costs much cheaper than going to movies, as well as homemade popcorn. You can check out free movie sites, too. Enjoy evenings with friends by going out on a Ladies Night either Tuesdays or Wednesdays when drinks are given for free! And check out this website called Gver.net, you should be able to get freebies such as furniture, electronics and household items.
7. Monitor Exchange Rates. Before transferring to my Philippines account (which is mainly used to pay real estate investment), I try to wait until the exchange rates are better. It does not have to be a big difference, but it pays to wait. Lately the rates have been fluctuating between PHP 13.50 and 13.80 per AED, so if I just wait a bit longer I could save up as much as AED5, depending on how much the remittance is, of course. No amount you invest in your savings is insignificant; like I said, every AED1 makes a difference.
8. Create a budget, automate and stay on track. Create a budget by recording your expenses to identify how much you spend each month. Use this as a guideline for your spending and saving habits. The “perfect” budget will take some time, but you can learn to adjust as you go. Identify the largest amount of money you can commit to putting away on a regular basis and stick to that amount. Doing this on a set schedule will help turning saving into a habit.
9. Watch your savings grow. Here is the best part! After saving small amounts per month, you would be so used to saving that it becomes a part of your system, and seeing it grow motivates to put aside more money. I prefer having a separate savings account specifically for my goals, preferably with the same bank as my salary account so I don’t get charged for online transfers. Check your savings account every now and then and you’ll feel fulfilled to know you have discipline.

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It is challenging to begin and even more challenging to keep going. Similar to following a certain diet – it could be a struggle at the beginning but if done well produces good results. Be patient! It takes time to build wealth – nothing “instant” is ever good – so take it easy! Baby steps. You will reach your goal a few months (or years) later, but you will still get there. Once you have the basic framework for your savings, you can start saving for long-term goals, such as retirement.

There is no better time to take start taking charge of your future but now. Think about time, peace of mind, financial freedom and security. Your future self with thank you.

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