Image courtesy of yomanimus
Our school education does not teach us much about handling money in life and this has caused most of us to enter the working society without much knowledge on how to handle our own money. I noticed that there are people who are working for 20 to 30 years in the society yet they do not have any savings at all. If they were to get retrenched, they couldn’t survive even up to a month and that is something that we definitely want to avoid.
When I was younger (around 13 – 18 years old), I am always spending more money than I earned. This means that my bank account is always near the zero mark. Any allowance from my parents or paychecks from my part time work just ended up with me spending it on food, clothes and entertainments.
Somehow it seems like the older I get, the more I spend. When I was 13 to 16, I spent much of my money on the internet gaming cafes playing online games with my friends and when I was around 17 to 18, my expenses rose and I found that I was spending more than what I could afford.
I started to play pools, singing karaoke, eat at restaurants, frequent the clubs and chasing girls. All these are costly activities and my allowance from my parents was not adequate to sustain my spending. I picked up a part time job to help me sustain my spending and also hoped that maybe I would have some excess money so that I can save a little. However as my income rose, my expenses went in the same direction.
As I had started to read personal development books during that time, I became frustrated about my lack of savings. I began thinking of what will be the best way to increase my savings and I came up with the idea of opening a new bank account.
I thought that if I am spending from the same account where I am saving money, I will be tempted to spend all of what is available in it. However if I were to have one account for savings and another account for expenses, then the amount of money in my savings account will definitely be increasing as I will not be spending any money from it. It was like an “Aha!” moment to me and I went off to create my new bank account.
I thought that if I have only a single bank account and all my savings are in it while I am also spending from the same account, I am going to be tempted to spend all the available money in that account.
I started to deposit money into my savings account monthly and never spend a single cent from it. After a few months, I finally had some savings and up till now it is always increasing as I save regularly and never spend from it.
Having a new bank account meant for savings only is a way that has work well for me. If you do not have much savings and you want to know what is the simplest way to do it, follow this formula.
- Create a new bank account meant for savings only.
- Deposit a minimum of 10% of your income into your savings account monthly.
- Do not draw any money out of your savings account.
I have done it and saw my savings increased from nothing to something and I believe you can do it too.
Personal Development Blogger
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