How To Create An Aggressive Saving Plan In 2023
Unless you’re living under a rock, you’ve definitely heard the saying, “Save money if you want money to save you”. True that. It might sound a bit of a cliché , but it calls out for something extremely crucial.
Everyone speaks about how much they have spent on their new house, but very few people may tell you how they have saved up to buy it. For starters, the way you save money influences the way you spend it.
Your savings have a very vital role in deciding what your future is going to shape up to. Not only that, but your present situation also depends on how you can save.
So here we are, serving you some simple yet effective strategies that will help you build a better future via an aggressive saving plan. Keep scrolling to know more!
Why would you want to consider a saving plan?
We have already discussed in bits and pieces about why you might consider an aggressive saving plan. You could be saving those bucks for a bunch of reasons- be it personal or social reasons, or just to dial into your regular habit. That may include –
Saving for an event like a marriage
People try to save a ton of money for events that are as prominent as their weddings. For the record, marriages are events that require a considerable amount of money to be spent on parties, guests, and good food to name a few. Weddings demand a never-ending list of expenses and it’s often hectic to plan one.
In case you are planning your wedding in a few years’ time, or even just thinking about it, you should be saving right from today. For starters, you may start saving penny by penny and you’ll certainly feel great about it a few years down the lane.
Saving for kids’ education
Your children’s education can be a major reason to follow an aggressive saving plan. Schools and colleges have become so expensive lately that it is hard to tackle without a chalked-out saving strategy.
Start saving for your kids’ education from the initial days, probably with a 529 saving plan. There are a plethora of saving plans out there especially tailored for children’s education.
You can research for yourself and pick the best saving plan according to your convenience. After all, your kid deserves the best when it comes to education.
Saving for your retirement
Your lifetime savings have a crucial role to play in the years after your retirement. You could argue that your retirement is far away from now, but it’s never too early. The more time you have, the greater the savings you can prepare for, and reap the greater benefits later.
Apart from the retirement benefits that your organization has offered, you should make an effort on saving from your earnings as well.
Even if you wish to retire relatively early, you need a generous amount of savings that can compensate for the salaries you could have earned in all those years.
Only then you can conveniently think of retiring to pursue hobbies, gain financial freedom, and prioritize your personal life over the professional one.
Saving to prepare for a major career switch
Sudden career switches are not a new topic in today’s world. An increasing number of people consider changing their professions even after investing years in one career line. But what comes of most use while making a decision as huge as a career change is the savings you have.
It can take years to settle and establish yourself in a new field. In such a situation, you must have a decent amount of savings that might aid in stability until you start earning decent out of your newer pursuit.
Moreover, a new career might demand more holidays from work, additional degrees, and unpaid internships, to name a few. All these call for huge expenditures.
Saving for emergencies
The most obvious purpose of saving money out of one’s earnings is to be prepared for emergencies. Unprecedented events like medical illnesses, natural calamities, and sudden loss of jobs, require you to have enough money to go through the same.
For times like these, you can start with simple plans like fixed deposits or decent interest-earning bank accounts.
Living in an ever-changing and dynamic world has successfully taught us a lesson that it’s imperative to save for your bad days. The money you save during your good times is going to be your shoulder for support in your worst days.
Strategies to develop an aggressive saving plan:
Having learned the answer to the ‘why’, it’s time to know the ‘how’! We are at your rescue with some of the ideal strategies and tips to build the perfect saving plan in place.
Get rid of debts
The first prerequisite to an aggressive saving plan is the elimination of all your debts. The worst part about debt is that it burdens you with high rates of interest which sums up to greater amount of money to pay back from the pocket.
You won’t be able to save properly until you clear your debts. Credit card debt is one such burden that annoys us with its high-interest rates. Always remember that a debt-free life is a great asset in itself, and it is no less than any other aggressive saving plan.
Plan your grocery expenses
You would be amazed to know that grocery expenses consume a generous chunk of your monthly expenditure. It might seem impossible, but the last-minute purchases of those irresistible hand make cookies and doughnuts at the supermarket add up to huge bill amounts.
Start buying groceries in bulk to benefit from offers that apply to bulk purchases. Experiment with dishes by planning to make them with the ingredients you already have at home. Make a shopping list for the essential items and follow it like it’s your supermarket Bible!
Take up a side hustle
A second job is always a sweet deal. There are endless part-time opportunities available, and you can work in the late hours after you are done with your full-time work. You can take up freelancing in fields like writing and designing where you can work from home.
You will therefore be able to use your skills more effectively. You can also teach school or college students to have another stable source of income.
Work overtime
If you are not quite excited about the idea of taking up another job, you can work overtime or look for work-from-home jobs as well. Tell your boss that you are open to work during late hours.
This would be hectic but it can help you earn a greater deal. This, over time, however, would mean very less quality time with your family and friends, which may disappoint you. If you are comfortable working overtime while keeping the work-life balance intact, then just go for it.
Track daily expenditure
Make a list of the expenses in your daily life. Keep a note of the daily expenses in a saving log or journal, for example. Track the amount of money spent on rent, food, entertainment, etc.
Check your bank statement frequently and your debit card or credit card usage. Tracking your expenses will help you understand better how to meet your daily needs more cost-effectively.
Reduce daily spending
You will realize there are tons of expenses for your daily needs, which you can meet by spending less money mindfully.
- Work out at home instead of paying the gym subscriptions.
- Opt for cheaper mobile and Internet plans.
- Get rid of unused assets like a spare car that you don’t bother to get out of the basement.
- Reduce the energy bill by switching off lights and fans when not in use.
Such simple strategies can reduce your expenditure tremendously.
Stop being brand-conscious
Coffee would still be coffee if it wasn’t from Starbucks! Yes, you need to get rid of that brand-conscious side of yours. An occasional shopping spree might leave you sulking at the huge amounts of bills that you have to pay.
Get rid of unnecessary luxuries that you can easily live without. Purchase products from the local market to get them at a much more reasonable price.
Set goals for savings
Pen down your saving goals in the short run and long run on paper and take a minute to look at them every day. It may become your source of motivation to save more.
Challenge yourself to resist spending those bucks you could have easily saved. Try a week-long or a month-long ‘no guilt shopping’ challenge to see how far you can go without having to spend unnecessarily.
Switch to automatic savings
If you don’t see the money, you are unconsciously saving it. Banks have the availability of automated transfers these days. You can have a certain percentage of every paycheck go to your savings account directly.
Ask your employer to deposit a portion of your salary each month into your savings account. The money thus goes into the savings and you don’t even see it and can resist the urge to spend it.
Check your insurance expenditure
Insurance is an expenditure you can cut down on by exploring better deals. Get in touch with your insurance advisor and ask him/her to help you save by opting for more reasonable insurance plans. A slight cutting down of insurance premiums annually can result in huge savings over years.
Keep an eye for discounts
Don’t feel embarrassed if you start bargaining while shopping. It’s your right and you must always try to get the best deal for yourself. Get rid of your hesitation and ask for any special discounts, coupons, and cashback while paying your bill at a shop, restaurant, movie theatre, etc. There is always a chance that you may be missing out on amazing deals if you simply don’t enquire.
Open a savings account
Banks in modern times allow freedom for opening accounts with no minimum balances. Look out for the savings account plans that give you high rates of interest.
A savings account at a bank ensures your money is safe, and you have complete access to it in case of emergencies. This is indeed an amazing way to park your funds securely and use them for your long-term financial goals.
Invest your money
You should start investing your earnings so that you get great returns from them. You can try a savings account, an index fund, or any other investment avenue that seems appropriate to you.
One prerequisite to start investing your money is that you must have an emergency fund that can last you for at least 3 months. When you reach such a stage, only then should you consider investing seriously.
Ask for a salary raise
If you are confident that you have worked hard for months and years at your company and you deserve a hike, go for it. Speak to your boss and show him your achievements over your tenure at the company.
You can’t expect your employer to give you a raise immediately. But it’s always safe to try your hands on it and ask if there is any scope for an increment, provided that you are deserving.
Options for saving plans:
Emergency fund
If you have extra money but don’t have any specific purpose to keep it aside, save it for your emergencies. Building an emergency fund is the most sensible option to consider whenever you have a pool of funds. Emergencies could be anything; it could be a car breakdown, a sudden hospital bill, or anything that you may not even dream of.
Having pondered over starting an emergency fund, you should aim to make it last for a minimum of 3 months. You must ensure that there is enough money to last even if you suffer from something as major as job loss.
Retirement plan
A retirement plan is essential to have if you want to live your old age at ease and also if you wish to retire early with sufficient funds in your account.
You can try for a 401(k) if it’s possible. You can drastically save by reducing taxable income. Ask your employer if you want to opt for such retirement plans.
Sinking fund
While an emergency fund serves during emergencies, a sinking fund supports your planned expenses that are sure to arise in the future.
It could be a new house, a new car, vacations, weddings, renovations, etc. People also maintain sinking funds to keep aside some money to buy gifts for close ones during occasions.
The Bottomline:
Through this article, I have discussed strategies that can help you consider an aggressive saving plan seriously. However, there’s a need to highlight the fact that we are all humans at the end of the day and we need to satisfy our cravings at times.
So, don’t be too harsh on yourself, and it’s okay to treat yourself occasionally. After all, everyone wants to have an escape; to rejuvenate themselves with parties, vacations, shopping, or maybe just a nice cup of coffee! Just try to maintain discipline to save as much as you can. That’s all for the day.
