How I Am Planning to Save $3000 Next Month
We are still in March, but I am already setting up my budget for April. As you might know, successful saving comes from tracking all your expenses and knowing exactly how you are spending your dear money. In my case, it helped me do some incredible savings. For example, read the story below:
In my case, around the 20th of each month, I usually have little money in my checkings account. Usually, that is because I have already paid all my major bills such as rent, insurances, groceries, credit cards, etc. It also includes all my automatic orders to savings and investment accounts.
As I normally get paid on the 28th, I do have around 8 days left. The good thing of having a few hundred $ in your daily account does help you mentally to delay consumer desires and lets you focus on your budget.
I eventually cannot spend what I do not have!
Obviously, I always have the security of the credit card in case I do need to pay for an unexpected expense.
So how exactly will I save $3000?
The easy answer is because my salary income in March includes my annual bonus. This will allow me to save more than I usually do and will also finance new investments.
As I do know how much money I need for my monthly expenses in advance, I can quickly predict how much I will be able to save. Realizing that goal is just up to me to accomplish (assuming I do not have unexpected expenses).
So:
Free Budget = Income — Fixed Expenses — Investments — Savings
On a regular month, my free budget accounts for entertainment, traveling, dining out and all the other little things that are not in the plan.
I try to keep my free budget around $1000 in months that will include some traveling such as weekend getaways or when I have friends over and will need to be the tourist guide. As I do know in advance I will not be traveling or having a lot of free time, I can reduce the free budget to half.
This will allow me to put into my savings account, $2500 from the bonus (the remaining will go to investments) and another $500 due to the reduction of my free budget.
The important message here is that if you get an extra source of income either a bonus, dividends, gift, inheritance or other, you immediately account for it in next month savings goal before you even think about spending it.
If I live 11 months of the year without a bonus, this month shall be no different!
The only major difference is that I will save & invest more! Unfortunately, I know many people that already know how to spend their bonus before they even got it.
Is not easy to be a saver when you are surrounded by addicted consumers…
What motivates me is that I will be able to retire early and do whatever I want and makes me happy in my late 40s, instead of working to pay my mansion mortgage or my fancy car loan till I’m 65.
Thank god I realized this still in my early 30s and wished I knew it in my 20s.
How much are you planning to save next month? Share your goal with me in the comments below.
If you like my content, please check my other stories:
Disclaimer: I am not a financial advisor. Always do your own research when investing.