The ever-increasing standards of living have made saving money even more difficult than it was 10 years ago. Saving money does sound like a pipe dream for most people who are surviving paycheck to paycheck. But the good news is, it’s not impossible.
With the right tactics, you can start saving as soon as possible from being financially stable to providing security in case of a crisis. Saving money is not just any other financial strategy but a survival tool that is slowly becoming a need.
But today we are not here to talk about the importance of saving. I’m here to give you 10 things you can do to boost your ability to save money.
Now let’s begin, shall we;
1. Create a budget
At the core of any financial plan is a budget. If companies can have it then you sure do too.
By creating a budget, you will be able to prioritize your expenditure, find a balance between your income and expenses and determine the optimum monthly saving amount.
The first step to do here is to check your credit card and bank statements, bills, and any other receipts to work out your recurrent or regular expenses. It could be your transport, insurance, electricity or loans.
Once you have a list with the figures, thoroughly go through each one of them and separate those that aren’t needs but wants. This could include those pairs of socks you buy every month or payment for that app subscription that you hardly ever use.
Now check the new list against your income. If you spend more than what you get in a month then you still need to slim down your expenses. Make sure some significant amount is left in your account after all expenses have been paid off.
You should also update your expenses yearly or after any major change in your life such as losing a job or getting a baby.
2. Monitor your spending
The biggest money trap is thinking spending on big things is what gets one broke. But instead, it’s the little things added up together that create the most damage.
A cup of coffee that costs two bucks isn’t expensive, right? But let’s do the math;
If you buy it twice a day, you’ll end up spending $120 a month. Instead, you can just buy a proper coffee maker at home for about 300 and the money spent on buying coffee daily could go a long way in repairing your credit card or other household bills.
It’s so important to keep track of all small expenses and day-to-day expenditures. At the end of the day, counter-check what you could have bought and you’ll be surprised to find bad habits that have been eating up your money.
Make sure you’re not living beyond your means. Just the thought that you’ll have to thoroughly go through your spending should ward off impulse spending.
3. Clear off high-cost credit cards
That cute little card in your wallet can easily bring you down if you’re not careful. Credit cards can be great. In fact, using them accordingly can increase your credit score but it can also bring you down.
The golden rule to using them is to always pay them on time and to only use them for necessary items. If you’re using your card to buy luxury goods and anything else, you may want but not need then you’ll soon be in big trouble.
To be honest, if you can’t be disciplined around your credit card then you should probably just chop it up. By recklessly using your card, you will end up with huge interest rates to pay every month which will reduce the amount of money you can save.
4. Open your savings account
It sounds pretty obvious right but I’m sure fifty percent of you reading this article don’t have one. A savings account will restrict access to your money and at the same time give you a higher interest rate than your current account.
Savings accounts are money storage centers where you can stash your discretionary income.
Remember, when we talked about the budget and mentioned you should strive to have some leftover money after you pay off your expenses?
Well, the remaining money should be safely stored in a savings account until you know what you can invest in. While the interest rates may not be as high, it’s always a great idea to have access to extra money which you don’t have use for.
Having it lay around in your checking account can easily tempt you into making impulse purchases. Scout around different banks to find out which ones have great rates.
5. Re-evaluate large expenses
The expenses that take the largest chunk of your paycheck should be re-evaluated every now and then. Go to your bank statements and identify what you’ve spent the most money on. Then, look for ways of saving money on these expenses by identifying alternatives.
For example, comparing different insurance providers, refinancing your home loan and all other services. If you take the time to revise these expenses you can end up saving thousands of dollars.
You can identify apps that have promotions and discounts to save you some money. Cutting down your expenses requires constant vigilance. Evaluate everything you spend your money on; including your internet and mobile service providers.
6. Cut off impulse buying
Today ATMs, credit cards and online shopping have made it so easy and convenient to spend money. Sadly, most of the time we end up spending on things we don’t need.
Succumbing to temptations all boils down to an individual’s willpower to control your impulse. You will have to have self-control. Studies show that self-control is a muscle that tires out with time and use and most of the time it’s the willpower of poor shoppers that gets depleted fast. The reason being these people face repeated complicated shopping decisions.
We’re not trying to say that poor people are the worst shoppers but for the people living in poverty each and every decision, even purchasing soap requires self-control and will dip into their limited willpower pool.
The best way to handle this is by waiting it out before making a purchase if you identify something you like wait at least 24 hours before making a purchase. You’ll be surprised that after the wait the urge will decline.
7. Smooth out your bills
I bet you’re wondering what this is. Well, bill smoothing refers to a payment system offered by utility providers where one is able to pay them monthly or fortnightly instead of paying one large bill.
This system will protect you from bill shock if you’re on a tight budget. By using this system, you will end up saving money over time through taking advantage of quick discounts for paying bills faster.
You can also set money aside every month for annual bills. That is adding how much your yearly bills cost then working out how much it would take to pay it every month. That way you’ll always have some cash available to cover the next bills.
8. Plan meals
Start planning your meals if you want to save money. It’s one of the easiest and most fun ways of saving cash. If you’re aware of what you’re eating for the week and have bought the groceries accordingly, you won’t need to randomly visit the supermarket where you might be tempted to make more purchases.
By having meal plans you’ll make it even easier to stay in line with your budget. Also, you can identify lower priced stores for shopping. However, before you buy any more food look through your pantry and finish what is left first. A typical family of four household spends about 150 a week on groceries.
This strategy is bound to save you about 20 percent of your grocery expenses. So in the end the same family could save 120 a month which could pay for other expenses such as electricity mobile data plans or internet.
9. Be a promiscuous buyer
The fastest way to become broke is by being a brand loyalist. A brand loyalist is that person who repeatedly buys a service or product regardless what happens. The seller is aware such a person is not price sensitive and they can easily take advantage of their loyalty by charging them non-competitive prices.
Never allow your emotional connection to a vendor to get in the way of you purchasing other brands. Start searching for better deals and you’ll be surprised at the availability of good quality better priced services and products. If you’re strongly attached to a particular expensive brand, chances are there are other companies lining up to give you better deals.
Being a promiscuous consumer can save you a lot of money. Only be loyal to companies that have fair price services and products of the highest quality trust me there are so many of them
10. Check yourself
This is the most important part of this whole process. If you want to save money, you have no choice but to check your mentality. Most people consider using all resources carefully and efficiently a virtue however as much as this is the case we need to be wary of being too frugal.
The easiest way to create a proper financial mindset is by focusing on earning. Saving money and investing it skimping on insurance and bills will not get you far and will create a poverty mindset. Such a mindset is preoccupied with shortage of cash and all the things the individual can’t acquire.
People create self-limiting ideas and beliefs based on fear of not succeeding or loss. Individuals with a prosperous mindset base their decisions on possibilities and are positive on their outlook and on money matters. What mindset do you have do you keep fretting about?
This is original content from NewsBreak’s Creator Program. Join today to publish and share your own content.