Save More Money With These Useful And Effective Tips
Saving money is one of the best ways of preparing yourself for a rainy day in the future. Growing your savings can also give you more freedom should you find yourself in need of quitting a toxic workplace or simply changing your career for whatever reason. The savings will help you through the transition allowing you to pursue your heart’s desires without worrying about your basic needs.
Below are a few practical tips on how you can grow your savings regardless of how low your income may be.
Keep A Record Of Your Expenses
The first and most crucial step in building your savings kitty is documenting all your expenses. This means you need a detailed spreadsheet where you can record every dollar you spend per month. This includes the big bills like your rent, cable, as well as the minor costs like the random cup of coffee you grab on your way to work or school.
Once you have all this information, identifying unnecessary expenses becomes so much easier.
Add Savings To Your Budget
The only way to get good at saving money is by being intentional. This is done through budgeting for your savings.
The data you get from recording your expenses should give you an idea of how much your monthly expenses are in comparison to your income. You can then use this insight to come up with a reasonable savings budget that allows you to tuck away some money without compromising your immediate needs and comfort.
Ultimately, you should be able to come up with a specific percentage of your income that goes directly to your savings account. Sadly, there is no one-size-fits-all solution here. While some finance blogs may tell you that your savings should be 20% of your income, there is no guarantee that the advice is practical to everyone. It all comes down to your unique situation. For instance, an individual with family commitments, e.g., paying for your elderly parents’ nursing care, may not be able to save as much money as someone with no obligations at all. Therefore, you need to be realistic with your situation. The important thing is to make sure something hits your savings account at the end of each month.
Set Savings Goals
Goals can be a great inspiration to save money. Think of something nice you want to do for yourself and start funding your account with that thing in mind. You’ll be surprised at how easy it is to make sacrifices when you know your money is committed to a greater cause.
You should create both short- and long-term savings goals. A short-term objective could be something more affordable, but it requires a bit of effort to fund. You’ll notice that your motivation to save for the bigger goal increases every time you hit the short-term objectives.
A short-term goal could be something like a vacation or a down payment for your first car. Meanwhile, the bigger picture could constitute something like a home, retirement fund, or an education kitty for your kids.
Know Your Priorities
One of the hardest things about saving money is having to deal with the reality that some things are more of a want than a need. For instance, you don’t have to replace your iPhone every time Apple drops the newest lineup. If your iPhone 11 is still working fine and you are satisfied with the photos and videos it captures, then you can skip two or so generations and redirect that money to your savings.
Using this logic, go through your expenses and identify the wants you can cut on. For instance, many people love takeouts even though they are usually expensive, not to mention unhealthy. Minimize eating out, make your food at home, and carry the extra food as your packed lunch. You can also downgrade or opt-out of subscriptions you barely use.
You don’t need to deny yourself every little luxury, though. This may make you feel miserable and reduce your motivation to save. But if you decide to treat yourself to something nice, look for internet deals that can help you save money on the bill. There are many websites, apps, and browser extensions that provide coupons for free.
Avoid Using Credit Cards To Cover Daily Expenses
Credit cards may be convenient, but they’ll increase your monthly expenses, reducing the amount of money you can save.
Use the document containing your monthly expenses to identify items that you can pay for in cash. This could include regular monthly bills like rent and utilities.
Pay Off Debts
Paying off debts must be a priority, especially if it’s accumulating high interests. If the interest rates are extremely high, paying off the debt should take precedence over saving money.
Once you are done paying the hefty interests, you can now redirect your efforts to growing your savings.
For the most part, the most challenging thing about saving money is getting started. But once you do, it slowly grows on you and becomes a way of life. So, start cutting those unnecessary expenses and create your short and long-term savings goals today.