Most of the colleges around the world give you a degree in education but do not teach you how to save money or make money. Most people find it difficult even to talk about money and save money. Saving money is a very simple process and can be done with a few steps.
If you are just out of college and landed your first job and finding it difficult for you to save then this article is a perfect read for you. Follow these steps to save money and you would see your money working for you.
Step 1: Pay the debt
Most of the college students in the US have a debt to pay off their student loans. If you have $1000 in your bank account and $10,000 in debt then you have a negative net worth of $9000.
Working multiple jobs or having side hustles can help you clear off your debt at a quick pace. If you are looking to buy materialistic things then make sure the value of the product would appreciate over time. For example, if you purchase a new car when you have debt over your head then you are making a mistake. As soon as you by a new car then the value of it falls by a significant percent. The same goes for other products and services. Buying a used car would be a good alternative.
Step 2: Create an alternative bank account to save money
Once you have cleared your debt or don’t have debt then make sure you make an alternative account which would be only for savings. As soon as you receive your salary make sure the first thing you do is to transfer the money into the alternative bank account. If you are looking to save more money then transfer above 30% of your income into the alternative account.
Step 3: Put your saving into the alternative account
Make sure you transfer money to your account every month or every week. The money would build up slowly and you would see your net worth rising.
Step 4: Make sure you never debit any money from the alternative account
Cut your debit card so that you do not use it to spend any money. It may look aggressive to cut your card but it is very essential to save money in the long run. In the case of an emergency, you can always go to your bank and withdraw money.
Step 5: Watch the money grow
After all the efforts you have put in to save money you can watch it grow by gaining an intrest fee. The interest you gain would get compounded and over the period of time you save would pile up money to spend on an asset like a home.
I have tried these steps before and trust me it works really well. It takes a while to get used to it but in the long run, it would definitely help you. With these steps to save money, I managed to pay the down payment for my first home at the age of 24. There were some sacrifices along the way but when I stopped renting a home and got my own it was worth the effort.