Keep the money in your purse and reduce unnecessary consumption

[The ultimate retirement guide: Level Four]

Does the ideal retirement life depend solely on the word "saving"? In fact, the most important thing is to consume wisely, make use of it, and cultivate a correct consumption attitude. If you always run out of money, it may reflect a lack of skills and methods in savings. The following 4 practical tips will help you save money easier:

1. “Three saving accounts method”

If you only save whatever is left each month, it is highly unlikely that you are a good saver. You may consider "automatically" transferring a certain amount of money to the savings account after the monthly payout, so that the remaining money can be used for living expenses and consumption, and the chances of successful savings will be greatly increased. You can also open three accounts with different purposes, such as saving accounts for saving, spending accounts for handling necessary daily expenses, and reward accounts for happy spending. Every time you reach a short-term saving goal, you may treat yourself some small rewards and keep telling yourself that every single cent you have saved will bring you closer to your retirement goals.

2. Assign yourself a goal

What are your financial goals? Going on vacation, buying a house, studying, or getting married? The savings goals you set up should be clear and achievable (you can start with a smaller goal). When you have a clear savings goal, you will be much more motivated to achieve your plan. For your first savings goal, you can start with keeping a sum that is equivalent to three to six months of expenses for contingency use.

3. Understand your spending habits and take one step at a time to change

Understand your monthly spending to identify the expenses on necessities and the other purposes before setting the savings goal. You can make minor adjustments to your spending habits such as cutting down on a few cups of store-bought coffee, bringing lunch to work and eating at less expensive outlets a few days of the week. It is important to take one step at a time. Restricting your spending too much at once might discourage you from going on with your savings plan.

4. Spend within budget

Come up with a monthly budget plan and a shopping list, and stick to it whenever you go shopping. For example, you only have a budget of $3,000 to buy a television, pick one that is most suitable to your needs within the budget, instead of being persuaded by salespeople for an impulse buying.

Investment involves risks. This information is provided for general reference only.