There are almost as many pieces of savings advice out there as there are aspiring savers: each of these is attempting to promote their strategy as the best, brightest and most efficient. Lots of these engage with the budgeting process as a function of lowering the amount that you spend, or differentiating between “essential” and “lifestyle” spending. But how can you determine which method is the best for you? In essence, it’s best to keep it simple. So simple, in fact, that what you spend might not even be the first thing you think about.

However, starting a budget by asking “what will I need to spend” might not be the best approach. Once you’ve paid your bills, your chief expenses, and dealt with the little things that jump up out of the blue each month, you may find that there’s nothing left over to help you grow in the longer term.

Thinking about budgeting from the perspective of how much you save can be a much more effective way to set about managing your personal finances. It’s a different kind of discipline – one that requires a bit more patience and focus on the long term effects of your actions.

It’s quite simple: plan to save. Don’t do your spending for the month and then save what’s left over: make a commitment to contribute to your savings beforehand. In other words: Pay yourself first. You can set goals and save toward them. And the sooner you start, the better you’ll do – your savings will compound more quickly over time.

It can be a challenge to adjust your frame of mind to this approach. There’s an old adage, though: you can’t miss what you never see. This can be applied to the practice of good savings habits! I’m talking about automating the savings process through your financial institution. You can set up a separate account with your bank and arrange for automated deposits from your payroll to be contributed each month: the amount will vary based on your needs and goals, but even a little bit helps. If you’re self-employed or your monthly income varies, you can assign a percentage rather than a fixed value.

Your personal financial stability can be your biggest asset in the long run. It’s just a matter of finding a way to make the changes you need to move toward that stability.

Tags : personal financesaving moneysavingssmart spendingspending