Everyone wants to save money, whether for a dream house, world trip, academic tuition, or to have a decent stash. You will find out great simple ways that will help you save your money more wisely and get closer to your dream. Believe, this process can be much easier than you think if you have the right approach.
1. Pay Off All Debts
In case you want to save money but still have some debts, this is the first important thing you have to do. Carrying a debt, especially a large one, is a real burden for you in terms of finances, as you spend excessively much money for servicing it each month. Just imagine that the money you pay for interest could be the money you put into your saving account. The number will impress you. Remember, once you have paid off all your debts, restrain from accumulating new ones.
2. Record All Expenses
To save money, you have to understand how much you spend first. Keep weekly track of all your expenses, starting from your cup of coffee or lunch finishing with household items, books, clothes, mortgage, and groceries. Include every single thing you have spent money on. Once you have collected all data needed, analyze it to understand whether all expenses are reasonable. Avoid impulsive purchases as it’s killing your budget.
3. Make a New Budget
Based on the info you got from analyzing all your expenses, now you will be able to come up with a new money-efficient budget to spend money wisely. The main task is to make your spending measure up with your actual income. Plan your expenses and set a limit to avoid wasting money. Calculate how much money do you spend on such needs as groceries, car maintenance, mortgage, gas, etc. and how much money you want to spend on your wardrobe, leisure, etc. to pamper yourself. In addition, don’t forget to put some money aside for unpredictable situations or emergency case.
4. Come Up With a Saving Goal
The best and the most effective way to start saving money is to understand what you are saving for. Set your short and long-term goals and decide how you will prioritize it. Having a clear saving target will add you motivation to put money aside more easily. In addition, an important step is to establish a timeframe and calculate your money goal for a new car, house, or vacation to know how much exactly you should save each month to achieve your dream. Monitor your saving progress regularly as it will help you stay inspired.
5. Automate Your Savings
Making your monthly saving automatic will make the process less painful for you. You can set up an automatic transfer between your checking and savings account. Almost all banks are offering this option. You can choose what amount of money you want to be automatically transferred. It can be $75 or $250, but it will help you reduce the temptation to spend money. This variant is an excellent choice to achieve your saving goal much faster as you won’t have even a chance to cheat yourself.
6. Get an Interest-Bearing Account
An interest-bearing account is a great alternative or addition to your saving account. This option is more suitable for your long-term saving goals. Consider an interest-bearing account to keep your savings separate from your primary checking account. You will never get a chance to borrow some money from it. In addition, over some time, you will get interested in your account based on your balance. You will get extra cash from merely keeping it deposited in a bank.
7. Smart Saving on Daily Expenses
One more tip to save more money on daily expenses is to keep on lunches by bringing it from home. Pack your lunch for work each morning instead of buying it at the office and you will be able to save $1200+ each year. You can also save some money on your utilities as well. For example, by lowering the thermostat by 10°F will allow you to save up to 5% of energy costs. The last but not the least way to save money and to be healthier is to quit smoking. Yes, it’s not that easy, but once you realize how much you spend on habit killing your health, you will be even more encouraged to do this. The number is nearly $3000 each year.
By implementing the following tips, you will manage to save money effectively. Get closer to your financial dream today.
SUBSCRIBE FOR MORE! HERE'S WHY:
1. You get 7 free books
2. You get the best money & productivity articles
3. You get the latest updates - all in one email per week