Saving money has become an almost national obsession (a good obsession I might add!). Economy is in a downward spiral and the financial crises has made it even more difficult for people to live their lives the way they used to. And so, knowing how to save money in today’s world has become a matter of survival.
Of course, the fact that so many people are out of jobs and have no ways of making money, makes the idea of “spending less and saving more” all the more appealing.
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In all honesty, if you want to save money, you have to make some sacrifices here and there, but the rewards are well worth the efforts.
If you are ready to cut your expenses and give up some luxuries in order to save some cash, here are some tips and ideas that will help get you and your family on the path to saving more of your hard-earned dollar each and every month.
1. Get Rid Of Your Debt As Soon As You Can
If you simply sit down and figure out how mcuh money you are spending on your debt each and every single month, you can see that the easiest and best way for saving some of your hard-earned cash is to in fact get rid of your personal debt.
Of course, becoming debt free is much easier said than done, but it is possible. Furthermore, the quicker you repay your personal debt, the less money you will have to spend on interest charges.
Once you get rid of your debt, simply re-purpose the monthly payment that you were paying for your debt prior to becoming debt free, to savings.
- In the event that you decide to begin saving prior to fully repaying your personal debt, it is a good idea to consider combining all your debts which would mean that you won’t have to pay nearly as much interest.
- The only thing that ought to take priority above eliminating debt should be to establish a kind of emergency fund where you set some money aside in the event that you lose all or part of your current income, you can have enough cash to live your life for a few months until you restore your old income stream or find another income stream.
2. Establish Your Spending Budget.
When you get done balancing your revenue with your savings targets and your expenses, compose a simple budget to help you know exactly how much money you can spend every month on any one of the items you have in your spending categories. This is particularly essential for overheads that have a tendency to go up and down.
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3. Quit Using Your Credit Cards.
It is really to your advantage to pay cash for just about everything. When you use a check or credit card, you don’t see actual money, so it is much easier to over spend that way.
- In the event that you must have credit cards with you, however, you are afraid of being entice to use them, simply place a picture or a note inside your purse/wallet to remind yourself of your saving goals and why you need to save.
- Credit cards are certainly not naturally bad; it all comes down to one thing; self-control. There are actually many benefits in using credit cards should you use them properly. However the reason why nearly all credit card providers make millions of dollars, is simply because folks find themselves spending cash that they don’t actually have.
4. Have Particular Savings Goals
Having goals (both short-term and long-term) is an essential part of saving money. It just makes it much easier to save money when you know what you are saving for. Lets say you like to buy a new CD that is being released by your favorite artist; simply figure out how much it will cost you, so you know how much cash you have to save.
That is an example for short-term saving goals. When it comes to long-term saving goals, like retirement living, you’ll have to be a bit more prepared. You have to find out exactly how much cash you are going to need to live in comfort for 15, or 40 years subsequent to you retiring from working.
5. Set Up a Time-Frame.
This is one of the most important parts of any successful saving plan. Lets say you want to buy a car a year from today. Make that date the official date that you will have to buy that car. That will help you even more to stick with your saving plan. However, be sure to set up realistic time frames.
If you know it’s not possible to buy that car with your income, no matter how much of it you save, then don’t tell yourself you are going to buy that car within that time frame. You will end up disappointing yourself and that may put your whole money-saving program in jeopardy.
6. Find Out How Much You Have to Save To Achieve Each Goal.
Write down every single thing you are wanting to save for and calculate the exact amount you have to save for each of them. For the majority of financial savings objectives, it’s wise to conserve exactly the same amount of money each and every interval. For instance, in order to set a $35,000 down payment for a property within Three years, you have to save approximately $550 every thirty days on a monthly basis.
However, lets say your bring home paychecks total to just $1000, in such a case, it is certainly not a reasonable goal to try to save $550 (more than %50) of your paycheck. I mean, you are going to have to live on the streets if you want to set aside more than half of your paycheck. But, even in cases like that, you can always fine-tune your time-frame to allow yourself to formulate some sort of realistic amount that you can save each month.
7. Always Pay Yourself First.
Saving money must be one of your biggest and most important priorities. The best way to stick with the plan is to take the amount you plan to save each month and set it into your saving account, as soon as you get your paycheck,
- Some people use the simple method of depositing %10 or %15 of each and every paycheck to their saving account. This almost always works great and the best part is that once you get used to it, it becomes so easy and before you know it, you have a good amount of money sitting in your saving account.
- To make it even easier, use automatic transfer to automatically transfer money each cycle from your checking account to savings account.
8. Keep Track Of Your Everyday Expenditures.
The amount of money you save comes down to two happenings and the difference between them: how much money you actually make and how much money you actually spend. Because you possess a great deal more influence on just how much cash you spend, its sensible to consider investigating your everyday expenditures.
- Take note of whatever you fork out your hard-earned money on for two to three weeks or perhaps 30 day or so. Keep your records as in-depth as it can be, and avoid leaving out anything, even tiny expenses.
- Designate a category for each and every one of your usual expenditures for example: Grocery, Utility Bills, Entertainment, Car insurance, Health insurance, Gas, and so on.
- Always keep a little notebook handy. Get used to documenting each and every purchase and don’t forget to save the receipts.
If you carry a smart phone, there are tons of free apps that can make it extremely easy for you to record your everyday expenses.
9. Open An Especial Savings Account With High Interest Rate.
In all honestly, if you want to keep an eye on your savings, you are better off to have your saving account separated from your checking account. Plus, lets not forget the fact that most banks do offer higher interest rate on saving accounts than checking (some banks don’t even offer interest for checking accounts).
Of course, if you are opening a saving account for really long-term saving goals, it would be wise to go with a higher-interest account such as money-market accounts or CDs.
10. Eliminate Unnecessary Expenses.
It is a great idea to go through your spending files perhaps after several months. You’ll almost certainly be amazed once you reminisce at your track record of everyday expenditures. You are going to almost certainly notice numerous totally obvious ways in which you can slash your spending.
Based on exactly how much you have to save, chances are you’ll have to form a number of tough decisions. Give some thought to your top priorities, and make your decision based on that. Estimate exactly how much those reductions could help you save annually, and you are going to become way more encouraged to save every penny you can.
11. Re-evaluate Your Goals And Objectives.
Take away your main overheads (we are talking about absolute necessities!) out of your take-home pay check. How much you are left with? Does it tie in with the savings goals you have set up?…
Suppose you’ve figured out it is possible to without a doubt survive on $300 a month while you bring home $460 a month. That means you are left with $160.
Lets say your budget will not allow you to fit in every one of your savings goals, in that case, analyze your saving goals and see if you can get rid of some that are on the bottom of your priority list, or try to see if you can fine-tune your time-frame for achieving those goals to see if you can get your saving goals in line with your budget.
12. Do Not Give Up
It may be hard to stick with your plan, you will have set backs and disappointments, but don’t let anything stand in a way of you and your saving plan. The rewards of saving money regularly outweighs any disappointment and negative feelings that you may experience while trying to save money.