“How am I going to save my money if I can’t go a month without being short on cash?” Is this a question you ask yourself every now and then?
Saving money is a lot easier than it sounds if you have a will and self-control. But it is a habit and it will take time and effort at the beginning. There must be things laying around your house that now you realize doesn’t add any value and you could have survived without it.
If you are the one that finds yourself spending unnecessarily on things you do not need or want or simply looking for some tips this is for you. These six tips will help you save money.
1. Set savings goals:
The first step to take, before jumping into the process of saving your money, is setting a goal. So, If you are planning to buy something like a house or a car or a holiday, it is going to be a lot easier to save your money and establish a financial goal.
However, this needs regular monitoring to make sure you are on the path.
We advise you to be reasonable with the amount and duration to keep yourself motivated. You need to factor in the financial market which might be different from what it is now.
2. List your expense
List your expenses throughout the month. Think of all the things on which you spent your money on the previous month. Take a piece of paper and draw a line in between. This will enable you to make two lists. Give the name “Must” to the first list and name the second one as “Option”.
Your “Must” list includes all the expense that is an obligation and cannot be avoided such as lunch, gas, and electricity. The options list should incorporate the expenses that are not compulsory and that can be escaped with a bit of self-discipline.
Analyze your “Option” list and mark those expenses which are completely pointless. A simple task such as this will help you identify how much you need, how much you can spend, and how much can be saved. Remember to do this every single month.
3. Make a Budget
After having a clear idea about how much you can spend in a month, it is wise to make a budget plan for your expense. Setting a portion of money on your expenses will save you from wasting your money.
While making a budget, do remember to include things that you need often, but not every single month such as car maintenance.
An example of a simple budget plan can be:
If the salary is of $3500
Student loans: $250
4. Cut unnecessary expenses:
Cutting expenses is an old trick to increase your savings but you have to be realistic. You need to figure out the things you really need like food, gas, rent, etc, and things you want like an iPhone, 56″ LED, throwing a party.
The first thing you can do is remove “luxuries” from your budget list. You don’t have to go to the spa every single week and you can survive without taking a taxi home every day from work.
You can also find cheaper ways to go on with your life. Do research on where house rents are cheap or move to a cheaper housing market.
Perhaps you are one of those people who spend a lot on food. Eating at your favorite restaurant regularly is a wastage of money and a burden to your plan. Try to learn how to cook by yourself or a cheaper restaurant.
While doing grocery shopping, remember that buying in bulk is a lot cheaper than buying in smaller quantities.
You can also cut off your expenses in transportation by simply walking to the places you can go by foot which has an added advantage that is your health or perhaps takes public transportation.
5. Open an account:
Instead of saving cash and stacking it below your pillow or somewhere secret it is always good to open a savings account in a reliable bank.
You can also research about various investment policies that have a better return than a normal savings account.
When you get your paycheck, be sure to deposit a certain amount of money from the expense list calculation which can be saved to cut off all the avoidable expenses.
It is best to deposit it on the same day you get your paycheck instead of postponing until the end of the month. This might seem like a lot of restraint and stress, but remember that the money you have is the money for you.
6. Monitor the progress:
It is essential to check the progress of your savings every month. If you check how much your savings has grown each month, it will keep you motivated and determined and also figure out if there is any problem with the plan and fix it before its too late.