Saving should be part of everyone's financial plan, whether you need to set aside funds for a new car, a tropical vacation, or building an emergency fund. By making some small changes to your everyday life, you can easily reach your financial goals.
We will share a few tips to help you stay on the right track.
Set Savings Goals
Why is saving money important to you? Do you have plans to purchase your first home or a new car? Are you planning to have a family and want to ensure you're all well taken care of? Maybe retirement is drawing near and there's a money-weight on your shoulders. Whatever the reason for wanting to save, establishing personal saving goals is the first step in making those savings dreams a reality.
Monitor Your Spending Closely
After you've set your savings goal, it's a good idea to monitor your spending closely for a month, taking an inventory on every single thing you pay for. Yep, we're talking bills, gas, date night, those shoes you just couldn't live without, each morning coffee shop latte and even that $2.00 ice cream cone. Track everything daily, put it all into a spreadsheet, and add up the total. If you've discovered you spent more than you made that month in pay checks, it's time to come up with a budget plan.
Establish a Budget
Did the result of you monitoring your spending shock you? Are you spending way more than you should be? It's okay, we've all done it. But now it's time to get back on track. Once you have your goals laid out, it's important to look at all of your financial burdens and expenses and determine what realistic budget looks like to you, with savings factored into the equation. Once you've established a "household" budget, stick to it as best as you possibly can.
Spend Less, Save More
This is really a no-brainer. The less money you spend, the more you'll have available to stash away for future purchases or plans.
Cut Out Unnecessary Expenses
This savings tip takes some self-discipline and may need to be done in baby steps. Some of the easier items to cut from your day-to-day expenses are the morning latte or the deli sandwich lunch. Instead, make coffee and lunch at home and bring them with you to work or school. You'll be amazed at how much extra dough you have at the end of each week.
Next, start taking a look at your subscriptions, like Netflix, Amazon Prime, Spotify, Sirius XM radio, or that monthly shave club you saw on Instagram that one time. Do you really use all of your subscriptions to their fullest? If not, it might be time to cut ties with them and put that money aside into savings. If you can't bear to part with one of your streaming services, consider cutting the cable cord and only paying for one service that gives you access to TV shows & movies.
Set Up Automatic Deductions/Deposits
If you're not already doing this, start. Set up automatic deductions to be taken out of your pay check and put directly into a savings account. You'll never miss it if you never see the money land in your account in the first place. And if you've established that budget previously mentioned, you should be perfectly capable of living without even a small amount being automatically stashed away.
Use Cash for Small Purchases
With every budget plan, it is important to account for some expenses that could pop up out of the blue. We've all needed beverage from the gas station during a long drive or a night out to see the newest Hollywood hit film starring our favourite actor. For these types of occasions, use cash whenever possible to make your purchase, that way you only spend as much as you have in your pocket/purse. You'll forgo getting the large popcorn bowl at the movies if you only have enough for the small. Or, better yet, skip the popcorn all together and hang on to your change.
Collect Your Change
Just as you likely had as a child, designate an item in your home as a 'piggy bank'. That few dollars/pounds and change you elected not to spend at the snack bar at the movie theatre last night can find a new home inside the piggy bank, along with any other change you have lying around. Have coins randomly at the bottom of your purse? Throw 'em in the jar. Coins cluttering up your nightstand or cupholder in the car? Gather them all and listen to the clanking sound it all makes when it hits the bottom of your bank. Collecting your change is an easy way to start saving real tangible money, and believe us, it will add up over time!
Invest Now, Save Later
When the time to make a large purchase, say a home appliance or new mattress, sacrifice the expense that it will take to buy a quality item. It may seem a little against the budget and savings plan, but trust us, you'll save money in the long run when you invest in quality products that will last
you for many years. Newer electronic products are also typically more energy-efficient, so while you might pay a bit more for it, your electric bill won't suffer as badly.
Conserve Energy
Speaking of your electric bill, there are many things you can do in your home to keep the cost of electricity down, even in the dead of winter or height of summer. Replace your old lightbulbs with LEDs, use fans instead of air conditioners, and unplug power cords when you're not using it. In the winter, keep your thermostats set at a reasonable temperature and wear warm clothes and use blankets. We're not suggesting you freeze yourself out of comfort, but you'll be surprised to see what a conscious effort to keep energy costs down will do for your monthly bill.
Institute the 48-Hour Rule
The convenience of online shopping can be both a blessing and a curse for someone trying to stick to their savings goals and budgets. With services like Amazon Prime offering free 2-day shipping on many products, including household necessities, it can be very easy to go a little overboard with online purchases.
When you feel like you might be falling victim to impulse buying, take a step back and think "Do I really need this?". If you have any initial hesitation, follow the 48-hour rule and give yourself time to think about it.
We hope these tips will help you get started with your savings journey and keeps you on track with little to no difficulty. Look out for the part 2 of this post.
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