Saving money is not always easy and the hardest part is generally to get started. In this post, I am going to share with you the best ways to save money, so that you can gain some control of your finances and have less worries about your monthly budget.
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Best Ways To Save Money
Document your expenses
The best way to start with your money saving venture is by first assessing how much you spend. Start keeping track of all the things you spend money on each month such as coffee, cash tips, school fees, household items and fuel.
Once you have all the information, start organizing the list of expenses according to categories, for instance, groceries, gas and mortgage. Do not forget to total each amount and make sure not to leave out anything. Check your bank and credit card statements to make sure you have listed everything.
Start budgeting for savings
Once you have a realistic idea of what your total monthly expenditure is, you can start organizing them into a budget that works for you. An efficient budget must outline how your expenditure measures up to your total income. This way you can better plan your spending and avoid overspending. Include other expenses that you do not have on a regular basis, like car repairs. If possible, try to put ten to fifteen percent of your earnings away towards savings.
Look for ways where you can cut on spending
If you have a lot of expenses which does not leave you much room for saving, it might be a good idea to start cutting back. Check for non-essential expenses where you can spend less, like buying take-aways, or cancelling some of your monthly subscriptions.
Here are some tips for cutting back on everyday spending:
- Read through community event listings to locate events that cost less to save on entertainment expenses.
- Cancel memberships or subscriptions that you can manage without or do not use often.
- Cut back on certain non-essential expenses. For instance, limit dining out to once a month or stop buying take-away coffee and rather make a flask at home to take to take with you.
- Steer clear from expensive restaurants and rather opt for those that fall under a lower price bracket.
- Avoid impulse buying. Give yourself time to sleep over it. You will be thanking yourself later.
Create saving goals for yourself
Start thinking about goals for yourself that you want to save towards, for instance, getting married, putting away money for retirement, your child’s college fund, or planning a family vacation. Work out the amount that you want to save on a monthly basis and how long it will take you to save the money needed to achieve these goals.
Break your goals down into short and long-term saving goals:
- Short-term saving goal – One to three years (for example: down payment on your vehicle, family vacation, emergency fund for unexpected living expenses).
- Long-term saving goal – Four years + (for example: child’s college fund, retirement, home renovations).
If you are putting away money towards your child’s college fund or your retirement, a viable option is to save this money in an investment account. Although these accounts pose some risk of losing money, it could also generate growth when the market expands.
Bonus tip: Create short-term goals that are achievable. Reaching smaller goals to pay for a new phone, for instance, can be highly rewarding and encourage you to keep saving for future goals.
Get rid of your debt
Monthly debt payments are one of the biggest challenges as far as saving goes. A large portion of your salary probably goes to debt. The quickest way to get rid of debt is by implementing the debt snowball strategy. This involves paying off your smallest debts first and then tackle the larger ones. It sounds like an uphill battle, but it entails more a behavioural change than figures. Once your debts start shrinking and your income freed up, you will have money to use towards savings.
Start cutting down on groceries
Most people are taken aback once they have started their budget when they see what they actually spend every month on groceries. Most families who have kids spend even more. It is easy to splurge on snacks and sweets when you are walking those grocery aisles. And retailers are clever! They place all kinds of delectable treats at the checkout points and other strategic places that lure you into adding a few more things to your trolley. You will be amazed at how these little purchases can start adding up and depleting your budget each month.
Start buying generic
One of the most viable methods of saving money is to stop buying brands. In many cases, no-name brands offer equal quality compared to branded products. Generic brands of food staples (like beans or rice), cleaning products, meds, and paper products work just as well as their marked-up counterparts.
Start saving cash automatically
There is a way to save money without even thinking about it. You can set up your banking account to automatically transfer a set amount to your savings account each month. This way, the money goes out of your bank account each month and gets saved for when you need it. Look at it as an expense every month, like a funeral plan, or insurance product. It can be an amount that fits your budget. Any amount that is saved, no matter how big or small, is better than no savings at all.
Look at making use of fun saving apps such as Liberty Stash.
Ask for discount when you pay cash
If you do not ask, you will never know. Some companies that offer loyalty cards, offer special discounts on grocery items, movie tickets, flight tickets, or have student, teacher, or senior discounts. Some businesses offer discount for cash payments.
Save money by reducing your energy and water costs
You can reduce your electricity bill by simply making a few changes in your home. Repairing leaking taps or toilets, using LED lightbulbs, or setting your washing machine to wash your laundry in cold water, are all ways that can contribute to lower utility bills every month. Most appliances that are on the market nowadays, have energy saving features to help you save money on your energy bill, but keep in mind that they are pricey.
I hope this article about the best ways to save money was of some use to you and that you will start incorporating some of these methods to help you with saving towards your financial goals.
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