Before you start reading this article I invite you to take a sheet of paper and write down all your set expenses/categories. Your list may include:
- Mortgage payments or rent
- Car payments
- Bills (utilities, Cell phone, Internet,…)
- Groceries (Food, drinks, toiletry…)
- Eating out
- Transportation costs
Then track your regular expenses for the next month, follow what you spend per set, and come back.
What did you get? a large sum of money and a lot of expenses you did not notice before. You may also find areas you could start with to reduce spending and improve your savings.
Why should you consider saving money?
You should consider saving money for many good reasons. Maybe you expect to go on a trip with friends, or maybe you want to buy a house and you need to save for the down payment. Or perhaps, you are just aiming to grow an emergency fund so that you are better prepared for any unexpected expenses. Whatever your reason is, there are a lot of tips to save money!
Track your expenses and set a budget
The most important thing to saving money is to know where you are spending it. Install a mobile application that allows you to track your expenses or use simply a spreadsheet to record them. You will probably be surprised at where your money goes once you start noticing that you are spending it on items you don’t want or things that are not essential.
Once you have an idea of what you spend in a month and see areas where you can reduce spendings, you can set aside a reasonable budget and then stick to it. Your budget will help you limit your expenses and track your progress.
Set up a separate saving account
Review your budget and choose an amount that you can transfer automatically to a separate saving account each pay cycle. Your money will be safe there, and you will notice that your savings account balance is growing fast over time.
Use cash instead of a credit card
We live in a digital culture where it’s so easy to swipe your credit cards and buy something online. Prices look like a random number for you, so you did not realize how much money you are spending while processing payment.
Avoid using your credit cards and use only physical money for your spending.
Set up an automatic payment for your bills
With our busy schedules, it’s not uncommon to forget to pay some bills on time. Companies charge a late fee for any balances that are overdue. If you are paying multiple bills, those fees will add up then impact your savings. So, set up automatic payments for bills to ensure that they’re paid on time, and avoid any late fees.
Downgrade your cable, Phone, And Internet
In the age of free streaming TV, there’s no reason for you to be spending money on cable television. You could just watch everything online for free. You can also start splitting your streaming charges with friends or family to save a few bucks.
Cancel Paid Subscriptions, Memberships, And Services
Maybe you are subscribed to a magazine that you never read, or maybe you have a gym membership that you never use anymore. Make a list of your paid services, memberships, and subscriptions then ask yourself if you really need to keep them. If the answer is no, it’s time to cancel.
Turn trash into cash
An easy way to bring in more money is by selling items you no longer use. Look for the clothes you don’t wear, materials you aren’t using, old books you don’t read, or everything else you don’t need and put it for sale.
Quit Your Bad Habits
Bad habits like smoking, drinking, using drugs, or overeating are costing you more than just the price of your vice. Getting rid of your bad habits will improve your health, lower your insurance premiums, and save you a surprising amount of money.
Earn More Money
Besides thinking about cutting expenses, you could look for possibilities of earning more money. Try negotiating your salary at work, starting a second job, or freelancing in something you’re good at. With this extra income, your savings account will grow faster.
Saving money is not as hard as you may believe. Simply by making modest modifications, you can save a large amount of money. And the best part is that you’ll not only learn to respect money, but you’ll also discover which tactics work best for you while saving, so you can apply them again when necessary. Or perhaps you’ll continue to save so that you’ll always have enough cash on hand to handle whatever expenses arise. Having a little extra in your savings account can, at the end of the day, offer you the confidence and security to enjoy life.