Most common questions used to investigate
Do you have a steady job?
Do you have an emergency fund?
Are you straddled in debt?
Do you have a mortgage?
Have you considered an investment plan?
Do you spend more than what you earn?
Common conclusions
When you have a steady income from a regular job, saving money becomes easy. All that you have to do is plan your finances well. Even if you're able to save only a few hundred dollars every month, make it a point to set it aside every month. You'll be surprised at how quickly your savings add up. It requires a consistent plan to save and once you get into that habit, you'll start saving money.
Setting up an emergency fund is a critical part of saving. Ideally, when you start saving, build your contingency fund. This should be typically six months of your living expenses. For example, if your monthly living expense is $1000, you should have at least $6000 in contingency funds. This is not your saving and you should never count this money towards your saving. This fund will be a back when you lose a job or have some emergency expenses like medical costs or car repair costs between paychecks.
Debt trap is a vicious situation that you must avoid at all costs. While it is ok to have a credit card, make sure you repay the money back at the earliest to avoid any debt accumulation. This is important because when you pile on the debt, you'll be forced to borrow more to service this debt and before you realize, you'll be in a trap and won't know how to come out. Moreover, this debt trap can hit your credit scores as well.
If you have a mortgage, refinance it to get a reasonable amount of money that can be used for other investments or to repay a debt or any other emergency for which you need money. This is a good plan provided the prevailing home rates are favorable for you. So, think of this as an option to enhance your investment and saving.
Once your contingency fund is ready, start investing some money every month in a good investment avenue. The choice of investment plan depends on your goals. If you're saving towards something specific like a college education for your child or retirement, invest accordingly. On the other hand, if you want a regular income from your savings, bank deposits are a good option. Think of the end goal before you start investing.
When you spend more than what you earn, you'll have no saving and a lot of debt, which is definitely not a good situation to be in. Trim your habits and reduce your needs, so you can keep some aside every month for emergencies and savings.
Analyze why you're unable to save and make a plan to fix this problem.
References
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