People who live from hand to mouth will always say that the hardest thing to do in today’s economy is to save money. We disagree with this concept wholeheartedly because while we know saving can prove to be tricky, it is always possible. By following our guidelines, we hope that you will be able to save more money in the near future.
1. Record Your Expenses
Before you can start saving money, you must develop an outline of your expenses for the last few months. Whether you buy a soda from a departmental store or some medicine that you need, note down everything that you spend your money on. This is crucial because you will be needing a detailed list of your expenditure to find out where you can cut corners and save money.
2. Analyze Your Records
After you have made a list of your expenses for the last few months, sit down and analyze the list carefully. Scan it to find your spending pattern, and see if there’s anything you can cut down on. Make sure that your list is devoid of stupid expenditures such as wasting 5 USD per month on a gym membership that you don’t need or spending 20 USD on a monthly basis on sodas and drinks. We’re not advising you to stop spending on your recreational needs; we’re just telling you to pick them wisely and avoid spending money on them when you don’t have an abundance of it.
3. Set Up a Savings Account
When you have removed silly spending from your list of expenditures, you will see that you have some money left over. You should start by putting this extra cash into a savings account. Ask your employer to set up an automatic deposit for you and ask them if they can directly send a portion of your salary to your savings account and the rest to your basic checking account. This way, you will always have some money saved up on the side which you can use for emergencies.
4. Set Realistic Savings Goals
After you have set up a savings account, it is imperative that you set realistic monthly savings goals for yourself. It is crucial for you to meet these goals every month if you are to continue saving money in the long run. Make sure that you never overspend and fail to meet these savings goals.
5. Avoid Acquiring New Debt
The final step of saving money is to avoid acquiring new debt. Make sure that you are not signing up for any credit cards in the near future. We agree that sometimes acquiring new debt is inescapable such as paying for a house by taking out loans and then gradually paying them back. In situations like these, it is important to make the biggest down payment possible as it lowers the interest rate that you return the financial investment with and can thus prove to be critical in saving money in the long run.