WAYS TO SAVE MONEY
Setting your first step towards Financial Freedom!
In your quest to achieve financial independence, saving money is one thing you should keep on top of the list. There are no shortcuts to reaching your financial goals. It is challenging and will require you to commit yourself if you want to have financial freedom. You must stick to the habit of saving money and know where your money should go essentially, and find ways to grow your money to get the results you want.
Everyone wants to save money, but most of the time, it’s a big challenge, and most people don’t know where and how to start. There is no other way to reach your saving goal but take the first step. That is why we listed IDEAS for you to get the ball rolling on how to save money.
Determine where your money goes
It will be a great way to start with going over your expenses and spending- daily, weekly, monthly. List everything down. Organize your list. Begin with how much is your income and other sources. Categorize your essential spendings and those things that go for the “extras.” You’ll be surprised to see the map of your cash flow, and with that, you’ll be able to look where your money should go essentially, where you can adjust or what could go off the list to make room for your Savings. You may use App trackers that you can download for more manageable tracking.
Read: Money Management
Create your BUDGET!
After listing down your sources of income and spending, it is now time to make a budget. Plan your budget carefully so that you can plan for your spending. It sets what goes for your regular and fixed expenses (mortgage, rent, utility bills, and car or loan/credit card payments). It will be helpful, too, to set a limit on non-essential spending (entertainment, clothes, trips, eating out). By creating a budget, you’ll be able to see what can be adjusted to put aside and allot for your Saving goal.
Set your Saving Goal and Compensate yourself first
Setting your saving goal will give you direction and purpose. It will also keep you motivated to be consistent with your saving habit.
Heard of the “Pay yourself first” saving strategy? It is a way of setting aside an amount from your income that goes directly to your savings before making any expenditures. You may try this so you won’t feel so much pressure on what to be allotted to put on your savings. This financial strategy ensures that something is kept for saving or investing before your regular expenses and discretionary spending. You may try this by depositing a certain amount of your income directly to your savings account or doing an automatic transfer.
Establish your emergency fund
Life may throw a curveball, anytime. Setting up your contingency fund will prepare you for unexpected expenses and money emergencies. This fund should typically have at least 3 to 6 months’ worth of expenses. This fund may be of use during financial distress.
Adopt the Envelope Budget system
To avoid overspending, try this technique. This budgeting system allows you to set an amount of cash for essential spending. And this is helpful, too; rather than using your credit card, you’ll use cash, checks, or a debit card on payments. Thus, it will give you more control over your spending.
Pay Bills automatically
You may try to switch to paying your bills automatically to avoid late payment charges if you cannot settle them on time. Ensure that you have enough bank account balances to cover these automatic payments to avoid overdraft fees.
Read: Budgeting 101: The 50-30-20 Rule
Pay off your Debts
Debts can be problematic and may get in the way of your saving goals. It is better to tackle them first and start by paying off from your smallest to largest debt payables. You may also consider paying high-interest debt first. Once you’re freed up from what “robs” you of your income (debt), you can finally save up more and make progress towards your saving goal.
How to Save Money and Pay-off Debt?
Cancel, cut, downgrade subscriptions, membership, and non-essential services
You may be able to save money by canceling automatic subscriptions and unnecessary memberships, downgrading to a cheaper cable service, or considering cutting off landline services if you have a cellphone. There are practical ways to save money. You have to examine your list of expenses, see what can go, and through that, you’ll be able to allot more for saving.
Practice the 24-hour or the 30-day rules in spending
If you are looking to avoid unnecessary spending, try the 24-hour rule or the 30-day rule before purchasing, especially for the non-essentials. This will give you time to think things through if your purchase is needed or not.
Plan Meals, Pack lunch, limit dine-outs and take-outs.
You will save much if you have a meal plan and stick to a grocery shopping list, so you will not be overspending on food. You may try to pack lunch—Cook at home rather than dining out or doing take-outs. You may limit going out to eat once in a while but look for cheap but enjoyable and satisfying finds.
Here are some painless hacks to save money
Set a NO SPENDING DAY.
Look at your list of expenses, identify only necessities and do the “spending freeze.” Have the self-control to avoid shops that tend you to go impulse buying. Practice disciplined shopping habits. If you love drinking coffee, rather than sparing some dollars for Starbucks, opt for self-prepared coffee to bring along. Little save-ups for not spending any dime for unnecessary things and being done consistently can add up to your savings.
Choose Generic over Branded and Go Natural!
In buying a household or medical items, you may opt for generic brands that work just as well as the branded ones. Go for generic brands of medicine, food items, paper products, toiletries, cleaning supplies, etc. You may also try natural cleaning agents.
Save up by lowering your energy and water bill.
It is a smart move to switch to energy-efficient (LED) bulbs, turn off light and appliances while not in use, install dimmers, use alternatives like a fan over air conditioning (as long as tolerable), take shorter showers, fix leaks on pipes, etc. There are a lot of simple things you can do to lower your energy cost and save up
Go for DIY’s
Need some fixtures and repairs at home? Why not try to do -it – yourself? Need to change the color of your room? Try DIY painting. It could also be good family bonding to do some projects at home, like recycling old furniture into something useful, setting up a garden, and involving everyone! If you need help with some carpentry, you may ask for help from friends or neighbors. Rather than going to the salon, learn to DIY, fix/color your hair, do your mani and Pedi. This way will not only let you discover new skills, but also you’ll be able to save some dollars rather than paying so much if you will be looking for professional services.
Saving can be done once you learn to have healthy money habits. This may require self-discipline and control over where your money goes. If you want to reach your financial goal, there is no best time to do it, but NOW.