How to save $1,500 the easy way

JUST think how much you spend each day on a cup of coffee or bottle of water. If you find yourself spending AED 15 ($4) every day, over one year you will have spent AED 5,475 ($1,490) and that’s just one drink!

Small discretionary items that we purchase regularly are often the little costs we overlook, but over a period of time these costs begin to accumulate and you end up spending extra money which could be put to better use if you saved it.

It’s never too late to review your spending practices and learn the true value of smart savings habits. It all begins with learning what your savings can do for you both short- and long-term to appreciate the power of saving even the smallest of amounts each month.

Start by taking the time to follow these simple principles of saving and learn how your savings can reap you rewards…

Set targets

The key to achieving successful financial security starts with planning and organising your financial goals, so start by setting yourself a target (short or long term).

Ask yourself what you would like to do this weekend. As simple as it is, you may have just identified your first short-term financial goal which you can start working towards straight away.

As you begin to identify several short-term goals, start to build upon your financial targets and lay down goals you can achieve within the next year; it’s never too early to start saving towards next year’s summer holiday.

Medium-term targets have a longer timeframe of two to five years; this is a perfect target to set yourself if you are planning to buy a new car, save for your dream wedding or pay a deposit on a new home.

Finally, if you are thinking of saving for your retirement you will need to set a long-term target – broadly, those with financial achievements that are five years away or more.

Once you have set yourself one or two targets, whether they are short-, medium- or long-term, make sure your goals are specific to your financial needs, realistically achievable and always make sure you don’t lose sight of your initial target.

Trim expenses

With this, a good place to start is to identify your ‘needs’ versus your ‘wants’ – this will help you cut down on overspending on all those little items and splurging on the slightly larger items.

Other small adjustments can help you trim down your everyday expenditure, such as making the most of the shopping sale seasons, cooking meals at home instead of dining out and making use of discount vouchers and coupons.

Within no time, your financial trimmings will pay dividends as you take one step closer to your targets.

Stay on track

Finally, remember to always stay on track with your saving and spending. By setting yourself a target and trimming down your expenses, your last simple task is to review and track your budget. This will ensure you are still working towards your financial targets.

To stay on top of your finances at any time of day and learn extra saving tips, check out a new suite of 29 financial calculators launched on PracticalMoneySkills.com in April, now available as free iPhone apps at iTunes.

Pic credit: sheelamohan/ FreeDigitalPhotos.net

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