Many people feel a sense of anxiety when thinking about saving (save money) for the future. Especially, if bills seem to be eating up more and more of your take-home pay.
Saving for a new home, emergency fund, or much-needed vacation may seem far out of reach. Take a deep breath. Completely downsizing your lifestyle can be overwhelming and frankly unnecessary in many cases.
By adjusting your spending habits and reevaluating your priorities, even your most ambitious goals can be achieved with time, patience, and a commitment to long-term saving. Though to save money might be difficult because of some expenditure that seems necessary to our daily routine.
Cut out excessive spending.
Be more mindful of your money (save money) and stop impulse buying. Plan your purchases ahead of time, give your shopping cart careful consideration and have an honest conversation with yourself on whether or not you truly need these items and whether or not they can be sacrificed.
By skipping over impulsive purchases, these savings turn into useful dollars that can be pushed into your savings account. Another quick and simple trick to cutting costs is cutting out unused subscriptions. Check how many free trials have turned into full-blown subscriptions and trim off the excess money-sucking sources. Are you utilizing your gym membership you bought at the beginning of the year?
If not, consider sticking to your guns and making the most out of your money, but if hitting the gym routinely is not a reality for you then it may be best to cut your losses.
By scanning your bank statements, you can see how much-unused subscriptions and services are taking out of your paycheck. These quick changes can save hundreds of dollars over time that would be perfectly used toward a hefty down payment.
Don’t get caught with late fees.
Do you notice your bank account gets routinely docked because you forgot or flat out avoided paying your credit card bill? These late fees and penalties hurt your financial health and their impact takes creates a noticeable dent in your wallet. Avoid late fees by automating all of your bill payments.
Even if you are on time with your payments, have your bill automatically taken from your paycheck will allow you to realistically assess how much of your earned dollars can be used for fun and leisure. This way, you can avoid finding yourself at the end of the month without worrying about a missed payment. In addition, it might be coupled with the anxiety of needed spending money for personal expenses and the inevitable late fee to follow.
Reduce or eliminate credit card spending.
In the world we live in today, you won’t find too many people who carry cash. Spending with plastic cards in a way of life. You do not need to completely switch to used cash to manage your finances. Instead, keep a budgeted amount to cover your expenses and pay off your credit card.
Use your credit card for small purchases that can be paid at the end of the month. Examples, like gas and groceries that are already included in your personal spending budget. Do not continue to add more and more credit card debt for you to carry if you are looking ahead to purchasing large ticket items. At the end of the day, everyone would like the least amount of bills as possible and to maximise their take-home pay. By eliminating your credit card payments, this adds more money to your pocket with added peace of mind.
Saving long term is a process, and before attempting to save for large investments, events, or assets. Start with cutting unnecessary spending and reducing debt payments starting with the smallest amounts to pay off quickly. Starting with paying off your credit card is a faster way to add extra cushion to your bank account. Whereas paying off student loans will have a lengthier timeline. With the extra money not going toward paying off your credit card debt, this too can be pushed into your savings account that will add up over time.
Live within your means.
Tried and true. If you can not afford it, the solution is to up your salary or nix it completely. Generally, the latter will be more attainable in the short-term and the salary bump can be methodically worked toward. In the meantime, would your savings account be better suited for your one-bedroom apartment or should you adopt roommates?
Do you need a car for your commute or can you sell it and utilize public transportation? If your paycheck needs a boost, freelance work is an excellent way to create short-term cash that can be used toward long-term ambitions. In addition to paying your bills on time, select a designated amount of money to transfer to your savings account each month. There are a few different options when opening a savings account.
Consider opening a money market or a certificate of deposit account or CD. CDs limit your access to your savings account with higher rates of interest and penalties for early withdrawals. Devise a budget, set a savings plan, and consider opening a new savings account just for long-term planning.
CONCLUSION ON HOW TO SAVE MONEY
With this, to save money will look easier for you because you will spend judiciously. Planning ahead of the income or earning is very important to cut some unnecessary expenditure.
ABOUT THE AUTHOR
Jayson is a strong believer that you don’t have to be wealthy to live a rich and full life and wants to share tips on how to do exactly this. Whether its saving money tips, smart everyday hacks, or budget travel, he hopes to inspire others to do more with less.