The three keystage of saving money - where you are and the tools need

 

Having gone thru the highs and lows of saving money, I conclude that there is mainly three stage that we all experience when we try to save - find out where you are and what are the tools you need at each stage.


Key stage one: The clueless beginner

This is where you usually do not have a lot of money or even in debt. So every extra dollar in the savings account makes you smile. This is the time where you could save for the sake of saving. Use soap instead of shower gel? Checked. Put a water bottle in the toilet flush? Checked. Reuse rice water? Checked.

Tools to for beginner saver

I. Set up a budget
II. Track your spending.

Key stage two: The savvy consumer

You know what it means to be a smart consumer and most likely you have to manage to save a good amount. This is a crucial transaction stage between earning your way towards wealthy or so-so wealthy. Those aim to be so-so wealthy will start to consider upgrading life standard when they find a good value opportunity. You cherish value over face amount. Those aiming to be very wealthy have to be patient and run the endurance marathon to move to the next phase.

Tools for savvy saver
I. Set saving goals.
II. Automate your finance as time is more precious you now
II.  Look at investments/passive income seriously.

Key stage three: The Guru's

You paid off your debts, mortgage free. You may tell everyone how much you made but are very secretive about how much net worth you have. If you are not, people probably love to borrow money from you. At this stage, it takes more than a saving goal. It's about life habit. To most people, you are frugal person although someone will catch you splurging. You are aware that what to spend or save is a very personal matter but the end of the day, your habits will reflect on the paper. You could be taking luxury cruise holiday and yet couponing for toiletries at home. This is where the Jedi master lives.

Tools for Jedi's saver
You decide the rule, not one money tools can do it all for you. You are keeping a price book, making use of credit for your benefits, extreme couponing or point collecting, read on incremental savings, tabulate your lifestyle inflation yearly, learning from the best. On the other hand, you are also spending to the sweet point of being happy about spending money.

Life circumstances vary,  but I believe one need to be saving at least 40% of their take home pay or have a net worth of 5 times of their annual pay to be called a Guru.

So which stage are you in?

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