Everyone wants to save money, but few people know the steps needed to make it a reality. It’s hard to know what moves you need to make in order to secure your financial future. If a financial emergency, like being laid off, a health dilemma, family emergency, or a recession occurs then you need to have savings you can rely on. Savings give you the freedom to not stress when unforeseen expenses pop up and gives you flexibility to live your life your way. In this article, we’ll be giving you just a few ideas on how you can start to save more:
Track Your Expenses
It may seem obvious, but one of the simplest and most surefire way of increasing your savings is better tracking. Many Americans report better savings rates, as well as more focused debt payments, solely when taking the time to track their costs. It sounds old fashioned, but there are many platforms now designed to assist with your budgeting needs. Even a paper journal can help you tangibly see where your spending is going and what areas you can start to cut out. There are a few different methods, but one of the most popular saving rules is the “50/30/20” rule. This states 50% of your paycheck should go to needs like rent and food, 30% should go towards wants like clothes and concerts, and 20% should be used to save or repay debt. This is the simplest budgeting plan, but there are others out there better aligned to each individual’s needs and financial status.
Delay Unnecessary Purchases
While online shopping has been great for finding access to all sorts of goods, it can also lead consumers into making quick purchasing decisions without considering how it impacts their budget. Giving yourself a cooling off period to think about whether you really want to make an unnecessary purchase can help limit spending and keep you within your budget. Give yourself a couple of days, and then come back to your cart and review what had caught your eye – a lot of times, consumers find that they don’t actually need (or even completely want) to purchase items after giving themselves some time.
Pay Attention To Prices
Another great way to save is to more closely pay attention to the prices you see while shopping. Many brands have different prices, and there are frequently deals to be had if you’re willing to try different brands or foods. This simple practice can cut grocery spending substantially, which is consistently one of the largest expenses faced by American households. Furthermore, going shopping with a plan has found to be effective in curbing excess spending. Writing down everything you need beforehand limits deviations and short-term decisions that can end up increasing your bill. It’s easy to go in with whatever, but that can rack up a grocery bill that makes your head spin.
Coupons are another example of a great way to start saving on your food costs, which we’ve written about previously here.
Set a Goal
A great way to save money is by setting a concrete savings goal. Maybe you want to save $5000 in the next 6 months. To do so, keep track of your spending and savings at the end of each week and figure out exactly how much you can save to start working towards your goal. Setting goals is good practice when it comes to achieving your plans. Concrete goals and deadlines help keep you on track, regardless of what you’re saving for. Many retirement calculators online can also help show you how much you would need to save for retirement.
Limit Your Credit
While credit cards are great for building your credit score and for large expenses, they’re also an easy trap that consumers fall into. Their high interest rates can easily eat away at any money you would have to save, with plenty of cards sporting rates of over 25% a year. By limiting yourself to one credit card you’re not only simplifying your spending, but lowering the total amount of debt you’re able to take on. With multiple balances, interest rates, and due dates, it’s easy to lose track of where your money is going. Having one card helps keep your money in one place.
Saving money can save you from financial disaster. It’s important to save where you can to eliminate any future stress or worries down the line. Saving money isn’t as hard as it sounds, but it can be daunting for those that haven’t been able to establish a budget. If you take the time to follow these few simple steps now, the financial relief down the road could be life changing.
