More often than not, we want to save money. Or at least set aside a reasonable amount of cash that will get us through difficult times. May it be sacrificing your favorite slice of pizza, or ditching the habit of window shopping. Each one of us has a way of saving.
But if you’re like some who struggle in this aspect, read through the tips below for you to get insights when it comes to money management.
Minimize or fully eliminate your debt
Saving money can sometimes be a tough struggle, especially if you have pending payables. Budgeting requires discipline for you to follow through. One of the most challenging things to surpass is closing debts. The best trick to consider, however, is adding up the interest that you are bound to pay and think of the amount as the money that you can potentially set aside for savings. Having ample motivation in you can surely pay off those payables and start your savings.
Set a goal
What better way to save than actually setting up an action plan for it? It is essential to set up a goal when it comes to saving. As most financial advisors suggest, visualizing the amount and the day of when you finally achieve it can be of enormous help. In goal setting, start with the ones that are concrete and realistic. Think of something that you’d want to see in a short period. Three years is an ideal target timeframe.
Tip: Set a money goal and use a savings calculator for you to get an idea of how much you’d have to set aside each month.
Prioritize the savings amount
Have you ever heard of paying yourself first? It plays an essential role when it comes to helping you save. Try setting up a direct deposit and send it to yourself. Putting your savings first before anything else allows you to work within the remaining budget. Whatever you’ve set aside, try your hardest not to touch it. It doesn’t matter if the amount is at $10 or $100 per month, as long as you’d start something. After all, you can just add it up as you go. By doing so, you can put up investment money.
Stop your vices
Be it smoking, drinking, or whatever it is that makes you spend without much bearing, cutting them off can lead to huge savings. Take smoking as an example; majority of the smokers can spend up to $3000 per year with cigarettes. That’s a huge amount that you wouldn’t notice as you spend them on vices.
Luxury travel is, of course, a priority to some, but if you’re planning to save, try to book staycations. Surprisingly, it can help you relax, just like how those luxury travels soothe you. Not only does this allow you to save, but you can also reduce the risk of having cash loans for the extra expense.
Spend to Save
Weird as it may seem, spending to save is actually a thing. Ever think of investing on something expensive, yet durable? Like setting up home security, for example. Although you’d have to shell out a considerable amount, it is something that allows you to save in the long run.
Home repair is something unavoidable, but it is something that can be planned out. Make it a point to be cautious enough in terms of using your resources. Lowering the thermostat of your water heater can allow you to save around 3-5% of your energy cost.
You might not notice it, but packing your lunch works wonders in terms saving. A $10 meal can go as low as $4 if you’ve prepared it at home. Although it might take some of your time, bringing your lunch or actually curating your meals won’t only allow you to save. It gives you healthier meal options, too.
Consider Interest Bearing Accounts
Ever thought of interest-bearing accounts? Having dead money that bares interest, in the long run, can give your savings extra value. Though you might not notice it at first, you’ll eventually reap the benefits. Being able to separate your checking from your savings account allows you to reduce the urge to get money from your savings. Having two places to park your money on will give you a sense of security. It will also hasten your urge to opt for money loans.
Annualize Your Spending
Breaking down your expenses and adding them up to see the bigger picture works wonders. Ever thought of the amount you’ve spent regularly when it comes to buying snacks, which are mostly junk food? Think of how often you’d buy from a vending machine and sum it up to 12 months. The amount, which can be as small as $20 can end up to a minimum of $1000 per year.
These things don’t really require much knowledge. Aside from going through these tips, taking online classes regarding the topic can increase your knowledge.