There are many reasons to live within your means. Maybe you are trying to pay off debt quickly, build up a fund for a rainy day, or saving for a home. No matter the reason, if you follow these tips to save money, you will find that less money is going out the door, and more is staying in your pocket, or better yet, your bank account.
1. Start a Budget
Starting a budget and sticking to it is key to achieving successful finances. If you want to save more money, you will need to have a base knowledge of where your money is going. You don’t need to spend hours a month pouring over your budget, but you need to have something nonetheless. Make categories for must need expenses, and then fill in the fun things. While the discipline of budgeting is hard, it will help you breathe easier in the long term.
2. Pay Yourself First
Paying yourself is one of the best tips to save money. The key principle is simple: the moment you get your paycheck, set aside a previously determined percentage and put it into your savings where it will remain untouched. By paying yourself (or your saving account) first, you will not even miss that amount when you budget the rest of your income. This is also a sure-fire way to ensure your savings account continues to grow consistently.
3. Make Financial Goals
Goals and an integral part of having any success in your finances. They give you direction for your energies and when fulfilled, help you feel a sense of control and accomplishment. When setting your goals, think SMART! That means they are Specific, Measurable, Achievable, Realistic, and Timely. Making sure your goals are within your reach will motivate you to chase them even more. In addition, set short-term and long-term goals making sure that the short-term goals will help you better achieve the long-term goals.
4. Build An Emergency Fund
When you have an emergency fund you can breathe a sigh of relief whenever life throws you a curveball. It is the fund of money that is strictly for emergencies. It might look like a $100 bill in your wallet that you never touch, or $1000 quietly sitting in an account. Regardless of what it looks like to you, an emergency fund saves you money when emergencies happen. Since you already have money set aside for that unexpected hospital visit, you will not have to go into debt (and pay interest) to cover it. Long-term thinking always trumps short term impulse spending.
5. Cancel Subscriptions
But I hate ads and my Spotify is only $10 a month! Yeah, we’ve all thought that at some point. But when you do the math over a twelve month period, that $10 a month adds up fast. What if you put that $120 toward paying off debt (and saving money on interest) or investing in stocks? Suddenly, having all the television, software, and even shopping subscriptions don’t look as great. This is one of the hardest tips to save money because it requires evaluating your priorities and determining what is truly important. In the end, you may enjoy discovering new (cheap) hobbies instead of spending hours in front of the tv.
Check back in to read the next part of Tips To Save Money.