Whether it’s by putting off that Saturday dinner with friends or denying yourself a daily cup of latte, everyone wishes to save those extra bucks. Though everyone prefers a different way to save money, there are a few effective tips and tricks you must know if you want to save a considerable amount of money.
Let me share them with you so that you know what you need to do in order to save all those extra bucks. Have a look:
Set Your Saving Goals
Before you start saving, the first thing that you need to do is set your saving goals. Start by visualizing the things you are saving for and set your saving goals. It will help you stay motivated along the way.
For example, if you wish to buy an apartment in New York City, it’s a long shot. Saving for a month or so won’t help you. Thus, you need to make a proper plan. What’s the estimated amount you need?
Have you seen apartments in different areas of New York? If not, you must check them out now. If yes, you already have your goals set.
Get Rid of the Debt
Before you start working on your goal, be sure to get rid of all your debts, or else, there’s no point in saving. The reason being, whatever you’ll save will eventually go into relieving the debt burden you’re carrying.
Thus, it’s a smart approach to eliminate debt first and then you can move towards saving for your goals. Calculate the total amount of your debt and divide it into 5-10 parts, depending on your earnings. Once you’re done paying the debt as well as the interest, start saving a similar amount every month.
It’s one of the best ways to go. It will help you save a considerable amount of money without putting an additional burden on your pocket.
Annualize Your Spendings
How much do you spend every week? Do you know the exact figure or you’ve never really counted? Well, not counting the money you spend here and there is the worst pattern. It’s imperative to know your weekly or monthly spendings.
I usually prefer calculating the budget per week. It makes managing finances easier. I remember I used to spend $100 every week, so guess what I did? I stopped dining out at lunchtime.
I now bring home-made lunch to my office. It saves me almost $40 a week, $150-160 a month. It’s not bad. Isn’t it?
Cut Down on Your Expenses
We often fail to realize how we have increased our expenses, intentionally or unintentionally. It is one thing you’ll know immediately after you annualize your spendings.
So now you know how many unnecessary things are a part of your monthly expenses? It’s time to cut down on your expenses. Yes, you’ve heard that correctly. You cannot save money while splurging around and wasting money on unnecessary stuff.
Even things as little as buying energy drinks or nachos can add a substantial amount of money to your monthly budget. You’ll know once you break such habits down. My life became significantly peaceful in terms of finances when I left munching.
Create a Separate Interest-Bearing Account
Having your savings in your checking account can be problematic. You won’t even know when or how you withdrew the money recently and it will have a significant impact on your combined account balance.
Therefore, I always recommend having a separate interest-bearing account. It will be used only for your saving amount. Whether you have money in your checking account or not, you’ll know that’s all you’ve got to spend.
If you have long-term goals like purchasing a house, an apartment, or a car, it’s the best way to save money. I know because it’s the only thing that helped me out. Yes, the only thing.
Simple. Isn’t it? All you need to do is follow the tricks mentioned above and be consistent. Trust me; within a year, you’ll have a prominent amount saved in your account. Good luck, my friends!