In the world of finance, there are two kinds of people: the ants and the grasshoppers. As kids, we’ve grown up hearing this story of the ant and the grasshopper, where the ant works to the bone in summer time just to save for the winter, and the grasshopper just enjoy the summer breeze, hopping and chirping without a care in the world. Come winter time, the grasshopper is left in the cold, dying of hunger, while the ant reaps safety and stability in time of need. This has been a sad tale in our childhood years, yet little did we know the moral of this story could greatly help us in our grownup years.
Like the ant, there are people who are born thrifty and industrious, those who are gifted in the art of saving money. Others, like the grasshopper, may try to save a coin or two, only to succumb moments later when something catches their eye. If we don’t want to have the same fate as the unwise grasshopper, how do we save money effectively enough? Now, no amount of ideas can be the exact method. Each person differs in strategy so just pick the ones below that fit your lifestyle. Here are some basic ideas on how to become a nifty thrifty ant-human:
1. Write down how much you earn and spend in a period of time (like in a month or week).
You know how health-conscious people tend to count the calories they take in everyday and strive to only eat the kind of food that they really need? Same concept applies to your savings. Write down your income and jot down your expenses as well. This way, you get to track down where your money is going.
2. Small expenses should be treated like big ones too.
Don’t underestimate small things; they all start out small, you know. That’s why as much as possible, pick out the things you think you can live without. Learn to weigh the things you consider are important to you and the things you think are unneeded.
3. Split your expenses into 4 categories.
• Cost of Living – bills for rent, water, electricity
• Everyday Budget – jeep fare, food, etc.
• Wants – new clothes, gadgets, eating out, travel, etc.
• Savings - Lastly, how much you want to save after all that.
4. Make SMART goals.
This could be short-term or long-term:
• Short-term goals could be a new gadget, minor home improvements, vacation, etc. These could last from 1-3 years.
• Long-term goals could be for retirement, a new home, college fees, etc. These are goals good for 4 years and above.
5. Having a Rainy Day Fund is fun.
Set up a rainy day fund (like our ant from that story), by saving at least 3 months’ worth of everyday expenses. Expect the unexpected! Having a backup or reserve is always a good idea.
6. Get rid of any debts.
It can be such a pain if you’re placed in a deadly, I mean, “debtly” situation. As much as possible, stay away from borrowing money, and if you have to, make sure to pay it there and then. The sooner you do away with it, the better and more you can save money.
7. Pay in cash. Don’t use credit.
This way, you’ll avoid #6 altogether. Be sure to have cash-on-hand; cash that you’re willing to spend and won’t hurt your savings.
8. Don’t do “retail therapy”.
Some people, when down on their lumps, resort to comfort eating to ease the emotional strain they’re going through. Other people shop till they drop in order to clear their troubled minds. Don’t be like that. You’re not in the right head to make wise decisions yet and may spend more than you really need.
9. Do homemade meals more frequently; only seldom eat out. Reuse the leftovers.
You can save a whole lot more if you cook at home. Also, don’t waste food. Leftovers can last for days if you’re careful enough.
10. Don’t buy clothes you don’t normally wear.
“I’ve got nothing to wear!” says the girl who has a closet full of clothes… That just means we’re spending more than we really need to. And if you want to be able to put a few more coins, I suggest you buy clothes that are versatile and ones that you would most likely wear a lot. And for your old clothes, you could try selling them, which would mean more money for Mister Piggybank. Yippee!