The festive season is here, and you know what that means—fun, parties, picnics, and lots of money gifts from neighbours and relatives. It’s that time of the year to look forward to, and I believe you’re excited for it too. But guess what? It is also the perfect time to learn about savings and managing your money gifts.

What is Savings and Why is it Important?

Simply put, savings is a portion of money you get that you put aside to use later. It could be for emergencies or for a special purpose. In other words, you could call it a gift to your future self. It is a life skill that will come in handy now and in the future, even after many years.

Savings are important because they give you:

1. Financial security in case of emergencies
2. Financial freedom to afford necessary expenses without debts

How Do You Start Saving?

The fourth wealthiest person in the world, Warren Buffett, said, “Do not save what is left after spending, but spend what is left after saving.”

Trying to save after spending is like shooting yourself in the foot because you’ll most likely spend on what you should save. Here are a few tips to get you started on saving wisely:

Write a Budget

This is a list of income (allowance, gifts, etc.) and allocated amounts for different purposes like gifts, treats, charity, and savings. It helps you plan your spending and ensure you spend on what is important.

Identify Wants vs. Needs

The holiday season brings a flood of wants, but it’s essential to distinguish between wants and needs. Wants are things that would be nice to have but you can do without, while needs are things that are necessary for your well-being.

Before making a purchase, ask yourself, “Is this a want or a need?” This simple question can guide you towards mindful spending.

Set a Savings Goal and Keep Your Money

Setting a savings goal gives your money purpose. Whether it’s for a new gadget, a gift for a friend, or a future trip, decide what you’re saving for and how much you need to help you stay focused.

Also, stash your savings in either a piggy bank, a savings account, or a digital savings app. These not only protect your cash but also make it harder to fall for temptations. You can search for the best options that suit your needs.

Adopting a savings mindset is a small yet powerful step towards financial well-being. By prioritising your expenses, setting clear savings goals, choosing secure ways to stash your cash, and staying disciplined, you’re not just saving money; you’re building a foundation for future financial freedom.

Happy savings!