Struggling with saving money?
It is a common problem that a majority of us face daily. It is a constant struggle to lay your hands off that sweet-smelling money when there are so many places you need to visit, needs to take care of, and brands that you love. The hardest part is almost always the first step which is getting started.
In this article, we will revisit some common tips and tricks that will prove beneficial in saving money. It is important to save money as it provides sound financial padding for tough times. Not only is it wise to keep some funds nestled away, but it is also a good practice as it allows you to make sound financial decisions.
Saving enables us to prioritize and compartmentalize the needs from the wants. While it is good to indulge in some quality self-care once in a while, it makes no sense in purchasing items on an impulse just because you want to. Being aware of your monetary resources and putting them to the best use is an intelligent quality.
Best Money-Saving Tips
1- Cut Down On Spending Costs
Even though it may sound a little difficult and you might even have some trouble with it in the beginning, it is completely achievable and yields exceptional results. A good indicator that shows if you are being extravagant with your expenses is when you end up with no money at the end of the month.
The first step in doing cost-cutting is identifying and recognizing nonessential areas where you are spending more than you ought to, like fine dining, branded clothing, or entertainment. With a little research, you can even cut down on the fixed costs that are accrued monthly like internet service, cable TV, cellular services, etc.
You might be thinking how easier it is said than done. Here are a few ways you can practice cost-cutting efficiently.
– While shopping, use promotional codes, discount vouchers, or sale deals through reliable sources like DealMeCoupon.
– Get rid of unnecessary subscriptions that you don’t use by canceling them.
– Indulge in fine-dining once every six months while committing to cheap take-outs every once a month.
– If you want to spend on a non-essential, consider the value it will bring you. Think it over a few days, and if you still feel compelled to purchase it, then put extra effort into saving up for it.
2- Devise a Budget Plan
As outdated and old school as it may seem to you at the moment, budgeting is a great way to allocate your funds to expected expenses. However, it is not until you start recording that you will be able to plan a budget for yourself.
Categorically organize your everyday expenses into labels like gas, mortgage, college loan, food, groceries, etc. Add your observed data from the month, including even the smallest expenses like a cup of coffee or even a tip to your server.
Automate this process by downloading a smart app that can track your expenditure. Based on this information, develop a financial plan that assigns a fixed amount to every category, so you have a better idea of what you can save for the month.
A budget helps put a curb on over-spending and makes you more mindful of how you use your monetary resources. Ideally, you must be able to save 10% to 15% of your monthly earnings as savings.
3- Goals & Objectives
Setting SMART goals and objectives to save money is a great way to get things moving in the right direction. Set a savings goal- something meaningful that you want to put aside for, then figure out the timeline and the funds required to achieve that goal.
Your savings goals can be Short-term or Long-term and will require a plan accordingly.
– Short-term: These are goals that can be targeted for 1-3 years and may include vacation, new gadgets, emergency fund, down-payment for a car, etc.
– Long-term: Goals that reach well beyond 4+ years are your long-term goals. These may typically have your retirement plan, the education of your children, or your mortgage.
As bizarre as it may sound, but not everything needs your immediate attention. Prioritize what needs to be taken care of at the earliest. For instance, if you know your car is causing trouble and needs to be replaced, then get it done before it’s completely broken. In which case, you will not only have to pay for your commuting costs but also additional costs to get the car fixed and replaced.
That is unnecessary supplementary overheads that could have easily been avoided. Also, in aiming to save for your short-term goals, do not forget important long-term goals like your future family members, their needs, and their education. Pay off any high-interest debts on your credit cards before they become impossible to manage.
5- Bank Accounts
Savings accounts are a must-have in this age and time. They are the most secure and reliable way of putting together money. Financial institutions offer both short-term and long-term savings options according to your requirements. If you are unsure of what suits you best, then you can always seek professional consultation.
- Short-term goals can best be met, using the following FDIC insured deposit accounts:
– Savings Accounts
– Certificate of Deposit (CD) is a product that disables you from using a predetermined amount of fixed deposits for a fixed period. You keep accruing interest on that amount which is usually higher than other savings accounts.
- Long-Term goals can be helped using the following bank facilities:
– Individual Retirement Accounts (IRAs) are savings accounts that are not only tax-efficient but are also insured by the FDIC.
– Invest in securities such as mutual funds or stocks, which are a great financial instrument to increase your capital. There is a saying that goes, ‘higher the risk, higher the return’. This stands true with these investment products. Since they are not insured by the bank or the FDIC, there is always a great risk attached to them. A broker-dealer can help you get these products through an investment account.
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