Who doesn’t want to save money, invest in the future, and enjoy a financially stable life after retirement?
But there are tons of things to consider when it comes to putting aside some amount every month. From credit card bills that never seem to end, to loan installments and grocery bills, to taxes and utilities, you face a long list of insurmountable bills each month. So what is the way to get ahead?
Earning money is not easy. Whether it is a mountain of debt or an old unpaid bill, we all have to deal with numerous financial issues from time to time. That is why many people’s savings rate looks very dismal.
According to the Federal Reserve Bank (St.Louis), the saving rate in the US decreased by 2.4 percent in 2019. This is the lowest level in the past ten years. The economic downturn and wage stagnation are some of the reasons for peoples’ reduced inclination to save money. But it doesn’t mean that saving is not important. Saving money (even if you’re saving $20 a month) is worth your effort.
Remember that the more you save, the more you will be able to control your destiny. Your accumulated savings can help you eliminate financial worries. That is to say, from covering your healthcare expenses to making your travel dreams come true, your savings work for you in plenty of ways. Most importantly, they give you peace of mind.
So how can you save money to reap the economic benefits in your future?
Fortunately, there is a slew of methods and smart strategies to save money. If you have never taken a plunge into this journey before, the money-saving options might seem overwhelming to you. Perhaps you have no idea where to begin. To help you meet your money goals, we have enlisted some proven money-saving strategies.
Realistic Money Saving Strategies
1. Track Your Expenses
The rule of thumb to embark on a money-saving journey is “tracking expenses.” That means if you are looking for effective strategies to save some bucks every month, you must know where you spend money in the first place.
You need to make a budget to track how you are spending your weekly or monthly income. If you don’t know how to do it, take help from budgeting tools available online.
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When you know your financial standing, it gives you a quick snapshot of whether you can afford something or not when buying something. You can quickly estimate if the purchase takes you closer to your money goals or push you further.
According to Stefanie O’ Connell, a financial expert, it is easier to assess your financial standing when you have all your purchases or expenses in one place. It doesn’t end here. It also helps you evaluate the financial decisions of the past. For instance, you might be spending extra money on dining out or buying gifts for others. In short, unless you do not figure out your financial habits, you can’t bring about change.
2. Budget Your Money
You might not find something new or innovative, but it does make a difference when one wants to save money. Creating a budget is a primary step you need to take to implement your financial-related plan.
Linked to the last point, you need to track your expenses and must have an in-depth understanding of where your money goes. List everything out, whether it is groceries, mortgage, rent, cable, phone bills, gym membership, or anything else you pay on a weekly or monthly basis.
Once you have got everything figured out, make two sections of your bills based on when you are due to pay. Find out how much you are left with after paying all your bills. The leftover money is what you can keep for your saving budgets.
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3. Use Snowball Methods to Pay off Debts
Dave Ramsey was the man behind this popular method. He invented this method to help people get rid of their debts as soon as possible. Essentially, you need to be debt-free to meet your financial goals. The method comprises two strategies to help people kick off debt. The first is to pay off the debt with the highest interest-rate or clear your small balances first.
Many studies have shown that prioritizing small balances – the snowball method is a smart way to pay off debts. First, list all your debts balance according to their amount. Start with the smallest debt payment while making minimum payments for other debts. Once you pay your smallest debt, use your money to pay off other small debts. This cycle continues until you reach debt freedom.
The idea of becoming debt-free is all about feeling more powerful and motivated. Also, it allows you to gain momentum to implement your saving strategies successfully. A study from the Consumer Research Journal finds that the snowball method works effectively to meet debt payoff goals.
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4. Look for New Ways to Earn Passive Income
Overcoming debts is easier said done. In addition to trying methods like a snowball, you must think of new ways to increase your income. From selling older things on Craigslist or eBay to online tutoring and working as a freelancer, you can generate a passive income using numerous ways.
If you think you have excellent parenting skills, you can even pick up a babysitting job. It is the best job for parents who watch over their own children. They can babysit children who are the same age as their own children. This is an easy way to make some additional income for hours by doing what they do every day.
5. Commit to your Savings
This is one of the cardinal rules you must follow to keep saving money. List “saving” as an expense in the budget. Make sure to put some money aside for it, whether it is $30 or $100. It is one of the sure-fire ways to start accumulating wealth. You can opt for “Pay Yourself First”- a certified planner to help you initiate a smart saving plan.
The automated planner cuts out a portion of income and puts it aside before the user spends money on other expenses. It sets up recurring money transfer from your payment account to your saving accounts on paydays. In general, “Pay Yourself First” takes care of your spending priorities before you spend your earnings on less important things.
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6. Go Vehicle Free
This might sound impractical or unfeasible for many people. But if there is a slight possibility of doing that, it can help you save a lot of money. When people trade their vehicle for a bike, walk, or public transportation, they can reduce fuel expenses and save money up to $9000 a year. Not only this, but the decision is also tremendously advantageous for living a healthier lifestyle.
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7. Take Up a Money Challenge
You might have tried a lot of challenges in life, but have you ever taken up a “money-saving challenge”? If not, then we bet you won’t regret it. These types of challenges are not only fun but also a great way to change your bad financial habits. Start with something simple such as a “no-spend month.”
All it needs is a commitment to a 30-day challenge in which you don’t spend money on unnecessary items. It may include activities like taking a homemade lunch to the office and embracing some free entertainment ideas, walking to work instead of driving, and saying no to shopping for an entire month.
This exercise does not help you save extra cash but also allows you to reconsider your expenses. You will be able to spend your money more mindfully after revaluating your financial goals. You might discover many low and creative cost alternatives that make a difference in your balance sheet.
8. Work on Your Financial Habits
Keep in mind that your financial habits play an important role in saving money no matter how handsome of a salary you make. However, good and savvy financial habits do not just happen; you need to work hard until they become a part of your personality.
Racking up your monthly credit card without paying off its balance, for example, is one of the everyday financial habits of many people. Not reviewing financial statements and forgetting bill points are some other examples. All in all, poor finance management leads to a disorganized life.
In short, you must navigate your financial habits if you want to save money for the future.
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9. Outsource Business Activities
Developing a money-saving mentality is excellent if you run a business. You can outsource a lot of your business and household activities to save your money. Moreover, outsourcing gives you access to several competent money experts who can help you discover some cutting-edge solutions. This can help you enhance your business productivity, decrease business and living costs, and eventually save money.
10. Become Energy Efficient
There is no denying that taking small steps can make a lot of difference when it is about saving money. Becoming energy-efficient, for example, is a small but excellent way you can contribute to your saving plan. You can start by reducing your everyday household energy expenses, ranging from extensive house improvements to behavioral adjustments.
Conserving energy not only saves on your energy bills, but it is also a great way to protect the atmosphere.
Here are a few ideas you can use to become more energy-efficient and add to your savings.
- Replace incandescent bulbs with energy-efficient light sources
- Fix energy efficient windows
- Install smart thermostat
- Use power strips
11. Cut Your Food Expenses
A Gallup poll found that an average family in the USA spends approximately $151 on their food weekly. This is actually a considerable amount of money if you’re thinking of saving. People usually spend way more money on food expenses than clothes or other everyday items. That is what makes cutting food expenses significant if you want to save money, especially to make your budget work.
Here are a few tips you can try to cut back your food expenses.
- Become vegetarian
- Limit alcohol
- Plan menus that are healthy but cost-effective
- Stick to your grocery list when buying
12. Open an Online Saving Account
Online saving accounts undeniably offer people better savings options. Transferring money from an online bank has now become extremely comfortable. Plus, it has no additional charges. You only have to link your external bank account to a savings account to transfer funds.
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13. Sign up for the Reward Programs
If it feels annoying to deal with the massive mound of your loyalty cards, you can use them to add to your saving plans. You can opt for different cashback rewards to save hundreds of dollars. Gas loyalty card, for instance, can offer free gas. All you need is to build it up some rewards points and use them you’re your expenses.
Many retailers offer rewards on purchasing if you shop from their store. When you sign up on their mailing addresses, you can get numerous discounts and saving deals.
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14. Create Home Essentials Yourself
It is, without a doubt, a fantastic idea when you really want your saving plans to work. Becoming little savvy with the expensive store-bought items can help you save a lot of money. That means there is no need to buy cleaning detergents or solutions when a little baking soda, lemon, and vinegar can do the job.
Making your cleaning items at home is not only surprisingly easy and simple but also economical. And as they are all-natural, you don’t need to worry about industrial contaminants.
Bottom Line
All in all, saving money not only contributes to your retirement plan but also builds emergency funds. Putting off your savings plan just because you are grappling with credit card debts and other obligations is not a wise decision. You must not lose valuable investing time and start using some saving tricks mentioned above. These proven money saving strategies are great to help you eliminate your debt and accomplish your saving goals.
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