Welcome to SBL20 (Sycamore Business Lab): our weekly blog post where we address issues affecting you and your business.
Do you think you need to do better with your savings?
Do you know expenses play an important role in determining how much you can save from your income?
To attain financial freedom, you need to increase the gap between your expenses and your income, this gives your saving a lot more weight. Easy right?
There are 2 ways to doing this:
- Increasing your income
- Decreasing your expenses
Studies show that it is easier to decrease your expenses than increase your income because your expenses are controlled by you as opposed to your income which is controlled by how many clients you get (customers) or your boss (if you work with an organization).
We will share with you 3 strategies that will help decrease your expenses and increase your savings;
These 3 strategies will help you save better!
1. Prioritize your expenses
Analyzing your personal financial situation is a big step towards having better savings as it will help to identify the number of expenses you make per time. (Monthly, weekly or Annually)
By prioritizing your expenses, you will be able to see those that you really need to incur and those that can be avoided without having any effect on your physical or social wellbeing.
Assign priority ratings to your expenses like High priority, Medium priority or Low priority, this helps in identifying the most important expenses and the ones that are barely necessary.
2. Look for Saving Opportunities
In the process of prioritizing your expenses, you may discover that there are areas that you have been spending a lot on more than necessary. That should not make you sad because you are not alone. There is hardly anyone that does not have an area or two in his or her life where he or she is spending more than necessary, including yours truly.
The best way to find those hidden savings opportunities is to review each expense you listed while prioritizing them and find out if you have been prudent with such expenses.
3. Look for Cost-saving opportunities
After giving priority ratings to your expenses, it is time to see which of them you can reduce or even eliminate. Look for easy ways to cut cost from your day to day activities ranging from excess spending on personal care, groceries, telephone and data bills, electricity, etc.
For example, you can switch off the lights when leaving the house, or reduce your monthly data consumption, these might seem little but might save you a lot of cost in the long run.
In conclusion: Make conscious decisions to save better this year, take a critical look at your expenses from time to time to be sure you are spending money on the right things because “every penny counts”.