Saving money is easy. You just need to spend less on things you don’t need and set aside cash on your piggy bank or savings account. However, many people find it hard to start saving or even keep the habit up and running.
Everyone has their own reasons why they fail to start or increase their savings. Lucky for you, there are tons of ways on how you can start saving cash. Get ready to take down some notes for you’re about to find the best tips on how to save money this 2019.
Assess your finances
Before you start saving, it’s best to check your finances. Determine where you stand financially by answering the questions below.
- How much is your monthly income? Include all sources of income.
- What are your monthly and quarterly expenses?
- Do you have any debts that you need to pay for monthly, quarterly or yearly?
After answering the questions mentioned, it is time to organize your expenses by category. This will help you create a budget based on your income and expenses.
Plan a budget outline
Now that you know how much money goes in every month and how much your expenses are, it is time to create a workable budget. This will outline how much of your income goes into bills, debts and utility payments as well as money for your needs such as food, transportation. This way, you’ll know when you’re overspending.
Add a savings category on your budget
Start saving money by considering your savings as an expense. This way, your attitude towards saving would be a necessity rather than an option. Financial experts advise that 20% of your income goes straight to your savings. The remaining 70%, you will divide among your needs (50%) and wants (30%). This is called the 50/30/20 Rule Of Thumb.
Good Read: The 50/30/20 Rule of Thumb for Budgeting
Set a goal to save for
If you’re going to save for something, make sure to set a goal on how you plan to use it. Start by thinking what you wish to achieve with your savings. It is always good to set aside some money for both long-term and short term goals. Your short-term goal can be paying off credit card debts, fund mini vacations, or even do minor home improvement projects. For your long-term goals, it can be for your emergency funds, starting a business, buying a house or for your retirement.
Start paying off your debts
Now that you have a budget plan make sure to include paying off your debts on it. There are two ways to do it. One, you can opt to pay your credit in full if you have the money so you can save yourself from huge interest fees. Or two, you can start paying off the smallest one and work your way until you’re able to pay off the biggest balance.
Automate your savings and your budget
Automating your budget and savings is an easy way to save money, pay your dues, keep track of your budget and save both your time and effort. With the help of online banking and tools, you no longer need to transfer funds from your checking into your savings account.
With an automated budget, you get to link accounts, view your budget, oversee the numbers and even change categories. It gives you freedom on how you want to track and automate your budget. Some can also pay your monthly bills for you – freeing some of your precious time. You get to dodge penalty fees, and it gives you peace of mind knowing you made your payments and had your desired amount transferred to your savings account thanks to the many tools available nowadays.
Find another source of income
When it seems you’re having a hard time keeping up with your expenses, then it might be time to look for an additional source of income. This is especially true if you are unable to pay off your debts and save money and an emergency fund. There are plenty of jobs you can take either for a full time or part-time. Nowadays, you can even try and apply for remote jobs so you won’t have to travel and pay for transportation. You still get to stay at home with your work and earn.
Find a bank with attractive interest rates
Check how much your bank charges your account monthly and see if there are other banks which offer great deals after opening a savings and checking account. Some banks offer great sign-up bonuses as well as high-interest rates to their new clients. Compare the pros and cons of staying loyal to your bank versus switching accounts. If you think the switch would be more beneficial, then it probably is time to change banks.
Wait 30 days before buying your wants
Do you know the 30-day rule? In the world of personal finance, you can save money by waiting for days before you buy something you don’t need. For example, you found an expensive watch that you admire. However, you already have other watches you can use plus the high price makes it more of a want than a need. By waiting 30 days before buying it, you’ll have enough time to think if it is worth it giving in to your gratification.
Pay with cash instead of cards
Paying with cards allows you to see how much money you’re spending. While it might be a bit more convenient to carry debit and credit cards with you, cash payments let you have control over how much you’re willing to spend. It would be best to make cash payments as much as possible. If not, make sure to keep all receipts so you can still keep track of your expenses.
Saving money takes patience and determination. One can only be successful if you’re willing to put some effort, stick to your goal and live within your means.