A Primer On Savings — Franco Investment Co.

So! You’ve survived a pandemic, you’ve concluded that nothing can stop you and you’re now ready to save for your future. Here are a few tips to help you become a great saver.

Step 1: Create A Budget

Creating a budget can be a daunting task however creating a budget is essential to good money management. Budgets are highly personalized and vary based on income, expenses and lifestyles however when creating you should keep the following in mind:

Identify all essential expenses for the month. These expenses would be things such as mortgage/rent, utilities, food, commuting cost etc. These are non-negotiable expenses that must be covered to live comfortably.
Identify optional expense. These are expenses such as a cable bill, entertainment, dining/restaurant. These are the expenses you should look to augment as you determine the maximum amount of money you could save, and the amount of money you’d ideally like to save ass a part of your savings goal .
Though budgets are highly personal in nature we recommend that to start begin with a savings goal of 5% of your gross income in Year 1 of savings and work your way to 10% in Year 2 or 3.
Consider using budgeting apps such as Mint or Personal Capital to help streamline and track your monthly spend against your budget.

Step 2: Set an attainable goal

We know that saving can be a very daunting task, especially when both necessary and unnecessary expenses arises around every corner. Saving can be hard but it doesn’t have to be. When one is beginning their savings journey it’s a good idea to first set both a monthly and annual target you’d like to save. Setting an attainable target does two things for the saver:

Setting an attainable goal can help a saver have something to measure their savings success against. Having the ability to measure your savings can help determine whether you’re ahead, on track or behind your goals for the month or year. Measurability is important in the saving journey as it will highlight reasons for success or shortcomings and helps the saver better understand their saving capabilities.
Furthermore, saving correctly can give off a rewarding feeling, generally when one is meeting or exceeding their goals. Saving success can give off a rewarding feeling which is beneficial to continuing your savings journey and not only will make the action easier but may also inspire long term behavioral changes.

Step 3: Set An Automated Saving Schedule

Once your monthly savings amount is determined set an automatic transfer from your checking to your savings each month scheduled around your pay cycles to ensure that money is stashed aside before leisure spending.

Step 4: Assess Shopping Habits

Based on the goal you set and amount you’d like to save it is important that you analyze your shopping habits carefully. You’d need to make smarter spending decisions from the brand of water you buy to the frequency of clothes shopping. While we do not recommend living on poverty levels it is important that the you analyze in your life which products are truly worth the cost and which are only a brand name. By reducing cost in these areas it will increase the likelihood that you’ll meet your savings goal.

Step 5: Be Smart About Entertainment Cost

While it is always fun to hang out with friend and visit the local bar this often requires money that can ruin a savings plan however we do not have to sacrifice fun now to have fun later.

Consider having drinks at a friend’s place before going to the bar or purchase a bottle at your local liquor and share with friends before going out to the bar.
Consider watching movies from popular streamers such as Netflix & Hulu to alleviate the cost of the theaters.
Consider ride sharing options on Uber & Lyft to reduce the cost of traveling around town to hang out.

This will greatly reduce your monthly expenses on entertainment.

Step 6: Avoid Payment Plans

Aside from a mortgage, a car note and a few other important life investment decisions (i.e tuition) completely avoid making purchases that requires a payment plan. Considering getting that $400 watch or dress and the Company is offering sixteen easy payments of $25? Avoid it at all cost! Literally! If you’re considering a payment plan for a general purchase it is most likely evidence that you cannot afford it at the moment and should defer the purchase to a future date. Often times purchase plans comes with added interest, additional responsibilities in keeping up with payments in the future and often, the future payments interferes with current expense/savings.

Step 7: Refinance Debts

Have you been paying attention to interest rates lately? In case you weren’t aware, interest rates are shockingly low and have been for a while. Now would be a great time to call you debt holder or a consolidation firm and refinance your existing debts. A simple call can save you hundreds each month. While this is a smart option it is important to note that you should do research on any firm you’re involving in the refinancing process, generally you’d want to use a reputable firm that won’t try to negotiate a terrible deal and make your situation worst.

Step 8: Congratulate Yourself

While saving money is not rocket science the discipline required to be a good and consistent saver does not come easy. Be sure to congratulate yourself for reaching your monthly saving goals and assess and learn if ever you fall short. Congratulations can take many forms, the best form that we find is subtle pat on the back and peace of mind that you’ve just built a bit more security for you and your family.