Everybody earns money but not everyone can save enough for their future. Saving is a habit. But it can be very tough if you don’t earn enough. There are so many people who are to spend much more than what they earn per month. They somehow manage to borrow money from other people to manage their situations. But saving should not be much difficult if you know the simple ways that are effective in saving money. The best time save money is now, so to get started, here are 7 simple ways to start saving money.
1. Follow This Simple Formula: INCOME – SAVINGS = EXPENSES
A lot of people are saving the wrong way. After getting their salary, they spend it immediately and the extra money left is for savings leaving them with less or nothing. Well, if you want to save more money, turn it around and set aside more for your savings and only spend what is left of your income. Follow Warren Buffet’s advice, “Don’t save what is left after spending; spend what is left after saving.” By changing your mindset, you’ll end up saving more than you usually do.
2. Cut Down On Non-Essentials
If you really want to save more, cut down on things like soda, cigarettes, eating out or high-end gadgets. Check anything that makes you spend more. You can record your expenses on a sheet and total amount of your spending at the end of the month. That way, you keep track of your expenses and know where to spend your money wisely. One way to increase your savings is always looking for ways to reduce your expenses. Sacrifice small personal luxuries now if you want to reap greater rewards tomorrow.
3. Make Saving A Habit
A good simple trick of saving is to pay yourself first. Set aside 20% or more from your income as personal savings. Treat your savings like a bill to prioritize before anything else. Make savings a habit so to further reinforce you to do it, consider making it a regular expense like bills or groceries. You can open up a savings account where you can transfer your savings directly.
4. Set Monthly Saving Goals
Time is of the essence. The sooner you save the better it is for your future. When people are young, sometimes they delay saving because they think they will have a lot of time to save. But it makes life difficult when you need money for medical emergencies, the wedding of your kids or anything important that needs substantial amount of money. The best way to save is to set up short and long-term goal. If you can save even 10% of your monthly income, you can save a substantial amount at the end of the year. So, set such a goal for saving.
5. Automate Your Savings
Automate your savings so you don’t have to worry about it. This way you can eliminate the need to spend your money before you save. When you automate your savings, you don’t need to make initial deposits and you’ll feel as though you don’t have money, to begin with. You can get your employer to deduct a certain amount from your salary or ask your local bank to set up automatic transfers to your account.
6. Have A Spending Plan
One way to save money is having a budget. By having a spending plan, you can know more about your income and expenses. Once you figure out these things, you can find more ways to increase your income and reduce your expenses. You can gain control over your spending and allocate more money to your savings account. It takes some work but eventually it will be worth it. You don’t have anything else to lose anyway. Have free cashback app to have better control on your spending. You should also try expense tracker and other itunes best cash back apps available online.
7. Learn To Grow Your Savings
The best way for you to save more is to learn more. Get a financial education and learn where to invest your money to beat the inflation rate and taxes. Let money work for you by putting your money on high-interest rates saving accounts. There are various investments that you can use to save your money that is safe and sure. This could be in time deposits, term deposits, mutual funds or bonds.