It easy to spend money. Shopping without thinking, spending without wanting, eats up the major chunk of one’s income. According to Northwestern Mutual’s 2019 Planning & Progress Study, 22% of Americans had $5,000 or less saved for retirement; another 5% had less than $25,000 put away, and 15% had no retirement savings at all. Same holds true for most of the worlds population. It is a pity, when there are so many reasons to save for the future. The future doesn't have to be just retirement, The future is today.

Uncertainties in life are inevitable and often unpredictable. Between today and the conclusion of our income-earning days, a lot can and will happen. We might lose our job, take a pay decrease, relocate, or become unable to work. In addition, any emergency may rise in the future that may lead to a loss of surplus amount of money from our pocket.

Saving money for the future gives us protection against unexpected circumstances, with each penny saved, we ease a moment of our future. Savings plays a vital role in an individual’s life, be it poor or rich, no one knows what will happen the next day. Even if we lose our job but have savings, we can survive while looking for another job. Savings work when we don’t work. It helps us achieve goals and help pay off the mortgage early and live a debt-free life.

The “50-30-20” rule proposes a healthy balance for each “basket”: 50% should go to our needs, 30% to our wants, and 20% to our savings and investments. The percentage proportions represent a healthy balance between needs, wants and future investments, but the ratio can be adjusted to match an individual's life, circumstances and goals.

Sometimes the hardest thing about saving money is just getting started. The following steps can help us develop a simple and realistic strategy, so start saving for all the short and long-term goals.

Make a Budget
The first thing we need to do is make a budget and stick to it. Just by saying we will save and thinking about saving is not enough. We need to have a plan about what we do with our money. Once we have an idea of what we earn and spend in a month, we can organize income and expenses into a workable budget.

Track expenses
The second step is to figure out how much we spend. Keep track of all expenses—that means even coffee and every household expense count. Once we have the data, organize the numbers by categories, such as shopping, education, mortgage, etc.

Distinguish Between "Want" and "Need"
Understand the differences between wants and needs. Be able to say no when something doesn't align with our financial goals, be it for today or for the future. If the expenses are so high that we can’t save as much as we like, it might be time to cut back. Identify nonessentials that we can spend less on, such as entertainment and dining out. Look for ways to save on our fixed monthly expenses.

Cultivate saving habits in Children

It is incredibly important to teach children about saving and spending. They mirror our behaviors and will take our lead on the role of money in their lives. Some essential lessons include waiting to purchase something they want, identifying specific ways for children to save (such as using piggy banks), making wise choices, and understanding that money should be spent on necessities.

Set Saving Goals
One of the best ways to save money is to set a goal. Start by thinking of what we might want to save for. Figure out how much money is needed and how long it might take for us to save it. Here are some examples of short and long term goals:
Short term goals (1–3 years)
• Emergency fund (ideally 3–9 months of living expenses)
• Holidays
• Down payment of a car
Long term (4+ years)
• Down payment for a home
• Child’s education
• Retirement

Pick up the right saving tools
One might consider buying a house, saving for a baby, marriage, retirement or maybe a combination of all the above. Below are the main Investment options available in the market. An individual can opt different products based on their risk capacity and also based on their short term and long term goals. Just because one has money in the bank doesn’t mean they are fully secure. Inflation will depreciate our savings and emergencies might make a dent in our nest. For better protection, always make sure to allot a portion of the income to investments or long term savings plans. Popular investment tools are Direct equity, Mutual funds, Bank deposit, Real Estate Investment, Gold Investment, National Pension System and Public Provident Fund.

Watch your saving grow

Review the budget and check the progress every month. Not only will this help us stick to our personal savings plan, but it also helps us identify and fix problems quickly. Understanding how money is saved, may even inspire us to find more ways to save and hit goals faster.

The above strategies will help us to stick to a budget and save for our goals all the while allowing for some budgeted fun. Remember, a goal without a plan is just a wish. Write it down, create the time and opportunity, and make it happen.

Failing to plan is planning to fail, in 2022, lets Start Small, Think Big...Wishing all a happy and prosperous New Year.