Saving money. We all know we should do it, but somehow, for many of us, it seems impossible. There are many reasons we don’t save; we don’t make a lot of money, our cost of living is too high, or we are being crushed by debt. For many people, it’s a struggle with all three.

No matter the situation, it’s better to start somewhere than to do nothing, even if that somewhere is saving your loose change. The reality is, you don’t have to suffer to save money, but you do need to exercise self-discipline by sacrificing conveniences and comforts, and you need to do it consistently.

You may be thinking to yourself “I work hard, why shouldn’t I treat myself when it’s so little?” and you’re right. You do work hard. In fact, you work too hard to let fleeting desires rob you of a life spent with the opportunities, peace of mind and security that significant savings brings.

Here are four life-changing things that savings can provide.

Security. Arguably the most well-discussed reason to save is in case of emergencies, and for good reason. Nobody can predict the future, and although we all want to think our life will continue in a predictable trajectory, emergencies happen. Those emergencies may look like the loss of a job, a catastrophic injury, a natural disaster, death or any other myriad of possibilities. It gives a profound peace of mind to know you can afford to live while you are getting back on your feet.

Preparedness. While emergencies are things unforeseen, being prepared for large expenses that we know will happen in the future is also important. Let’s face it, houses need upkeep, cars are going to break down, and appliances will need to be replaced. The kids will grow up and go to college (hopefully), and you are going to get old and retire. In life there are some expenses we know will hit us at some point, and it’s essential to have the money we need to pay for these things when they happen.

Flexibility and Freedom. If you were miserable in your job, would you have the option to leave and find a new one? How about starting your own small business? If you wanted an extended holiday, would you have the money to do it? Savings gives you the flexibility and freedom to pursue your life’s passions. It gives you the resources to live your life on your terms.

Opportunity. Having access to a significant sum of money opens up a world of opportunities that you wouldn’t be able to take advantage of otherwise. How about low (or even no) interest rates on a large purchase when you make a down payment? Or perhaps you’ve found a great deal on something you’ve longed for, but it’s cash only. Savings allows you to jump in the event of a great opportunity.

That all sounds great, right? Well, yes, it is, but it’s not going to happen overnight. If you are on a limited income, building your savings will take some time. It’s going to take dedication and consistency. You have to focus on the long-term goal and actively work towards staying motivated and not discouraged.

Remember, no matter how long it takes you, that same time is going to pass. The only choice you have is whether you will reach that day in a better financial position or still struggling with the same financial hardships.

So where should you start? Simple, your budget.

It’s time to examine your budget, and if you don’t have one, it’s time to start one. The foundation for your savings plan is knowing how much money is coming in, and how much is going out. The money that is left after paying bills and expenses should go towards paying down debt and savings.

Step 1: Write down how much monthly income is coming in and all of the monthly bills and expenses. Make sure you write down all expenses, no matter how small. Remember, small leaks can sink a ship, and it can also sink your savings plan. The goal is to know where every dollar is going. Subtract the expenses from the income and what you have left over is what should be used to pay down debt and save. One of two things will happen at this point, you may be surprised at how much is left, which indicates there is more impulse shopping than realized. Conversely, you may be discouraged at how little is left, but don’t be because the next step will help.

Step 2: Study your budget and work on reducing expenses. What expenses can you eliminate? Perhaps getting a less expensive cable package (or cancel it all together) will save some money. Stop dining out, eat at home and set a strict grocery spending limit. What bills can you lower? Get a smaller phone plan, shop around for cheaper insurance, anything you can do to lower your bills, helps save you money.

Step 3: Find ways to make extra income. So now that there’s a plan to spend less, it’s time to figure out how to earn more. This could be anything from a part-time job, selling your unused, unloved or stored items (sell all your storage and save on monthly storage costs!), or turning your hobby into an income. Anything that brings in extra money will give you more money to save.

Step 4: Plan to save and pay down debt. This is the step to set savings goals. Now that you know how much is coming in and going out, you know how much you should have left to save. Save all of that amount until you have a small emergency fund, the general rule of thumb being around $1000. After that, split the money into two portions, one portion goes into savings, and the other goes towards a debt (in addition to the payment you usually pay). Paying off your smallest debt first will help boost morale. Once you pay off the first debt, take the payment amount you had before paying it off and add it to your savings amount.

As with any progress, the first step is always the hardest. We are confident that once you take the first step, however, watching your savings grow as your debt decreases will motivate you to keep going. We hope you have found this information helpful on your way to a brighter financial future. As always, if you need help, you can call us for a free financial consultation at 877-789-4172