The very famous Benjamin Franklin said, “A penny saved is a penny earned,” and sure he was right. Money might not be the epitome of happiness, but nowadays, it is a necessity. Imagine your life going smooth when one month you’re hit by a list of unexpected expenses. It feels like being stuck in a daunting, never-ending loop of costs and fees, doesn’t it?
Squeezing out a few bucks from your limited monthly income is challenging, especially if you can’t work more than two jobs to make ends meet. You have to be mindful of your income and expenses, and the best way is to control your spending and save as much as you can every month to prepare for an unforeseen emergency.
Do you know what’s even better? The grin on your face when you see those savings coming in handy when you need it the most.
There are many reasons for saving money. You will come across a lot of diversions vying for your attention and your wallet. You may see many advertisements of your favorite restaurant giving a discount on your favorite dish or an ad for a chic blazer begging you to add it to your closet.
All of these are undoubtedly legit distractions that are very difficult to resist. So before you start saving, you should have some clear goals. Firstly, setting up goals gives you an instant dose of motivation, and secondly, you can have separate savings account to stash up all of your savings.
If you’re out of cash, you can check with banks that grant loans even with a low credit score to help candidates in emergencies.
If you have a massive pile of debt you are trying to eliminate, you need to be a little creative with your spending and saving habits. Here’s a list of tips to help you do just that:
1. Keep track of your expenses
Some people tend to forget where they spent their money, and if that happens with you as well, you can start by saving your receipts. By the end of the month, gather them up, and sort them out. You can divide them into two kinds of categories like fixed expenses and flexible expenses.
Fixed expenses are the ones that are your essential utilities like; house rent, car payments, electricity bills, healthcare expenses, etc. In contrast, your flexible expenses vary from month to month. These include entertainment, dine-outs, clothes, etc.
If you still can’t keep track, you can easily download an app or software that tracks your spending.
2. Create a budget:
As soon as you get your monthly salary in hand, subtract the fixed expenses from them. After deducting the fixed costs, determine 10% of your remaining income. This ten percent should be your monthly saving.
Although if you get a chance, you can save twenty percent, 10 percent is the bare minimum. After further subtraction, evaluate the remaining income. Check if there is enough money to pay your bills and other fixed expenses.
If not, then try to reduce flexible expenses. Individuals who don’t have a fixed monthly income can set up an average for a few months.
3. Avoid impulsive buying
It is advisable to avoid unnecessary large purchases. If you are fond of shopping, even a short trip to a shopping mall or a few clicks on the website can blow your entire monthly budget.
Now one would ask, what are large purchases? It depends upon your budget. For some people, it can be buying a new house or a car.
On the other hand, buying new furniture, an appliance, or any electronic device for most people, and buying a new pair of shoes or a new book can be a big purchase for some.
So sort it out accordingly and try to avoid them as much as possible.
4. Reduce energy consumption
Electricity bills take away a big chunk out of your monthly income. So do yourself, your wallet, and the environment a favor by saving some energy. You can start by turning off the lights and unplugging appliances in rooms you’re not using.
Seal all the cracks in your home for better insulation to reduce the need for heating or an air conditioning system. Change the settings of your electronic devices to low consumption mode or hibernate them so that they utilize less energy. Another tip is to buy power-saving appliances like inverters.
5. Try to spend less on entertainment
We all tend to spend a lot on our entertainment. However, these expenses are the ones that you can avoid easily and save a lot of money. If your social group is such that they go to expensive bars and restaurants, you can get pressured into doing the same and end up spending more than you should.
So instead of being affected by peer pressure, you can suggest low-cost sources of entertainment. For example, instead of going to a theatre for a movie, you can watch it at your home under the blankets getting all cozy.
Similarly, instead of dining out at an expensive restaurant, you can host a casual potluck at your place. So there are a lot of low-cost entertainment things you can do and save money.
6. Start a side business
The best way you can utilize your free time is by starting a small side business. It can be anything like babysitting or walking dogs. If you are creative and can paint or create marketable products, you can sell them on any popular craft site.
Before starting up, ensure that you can comfortably invest your savings in starting a business without any debt. You can choose a venture that demands less investment and gives more yield. Similarly, getting busy on your holiday can save you money by not going out with friends or family.
A take-home message:
These are some tried and tested tips for saving money each month. However, some people still face difficulty because the most significant obstacle hindering them is themselves. So if you think that is your case, you can remove access from online banking altogether.
If you live with someone better at saving, consider giving them control of your savings. We hope the tips mentioned above are helpful for you. Good luck with your savings.