Sometimes it’s so hard to set a portion of our hard-earned money from work. It involves cutting down some unnecessary expenses in exchange of getting more funds for our future. Saving money isn’t being taught at school but this article will show you how to do it.
Whether you’re just starting to build your savings or re-building it because of financial crisis, these financial suggestions are good start:
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Create a realistic monthly budget
Realistic budget means that you can fulfill this and religiously follow it monthly. It can be daunting when you create your own budget but it’s all worth it. You can create it manually or using budget tool apps. When creating your budget, decide which expenses you should cut down so you can still live comfortably and without worrying about debt.
In budget creation, you should list down three categories: bills to pay and basic needs, savings, and for leisure. Even if you create a strict budget, you should know how to reward yourself too.
Gain more income
Sometimes having a full-time job is not enough especially if you have handful of responsibilities. It’s ideal to reduce your expenses and increase your income but sometimes it’s not the case. Try the following ways instead to increase your income and see what will happen to your monthly budget:
- Get a pay bump in your full-time job – this is not an easy but you can do it. You should learn to negotiate a salary increase with your boss.
- Get a freelance job – this job can be done inside or outside home. Freelance job helps giving you extra money to increase your savings.
- Start your own home business – if you’re good at something or you can create something creative that can be sold, make it your business. Time and effort put into this matter vary according to your schedule and talent.
Pay your monthly bills on time
This tip is a no-brainer because we are all required to pay our monthly bill expenses to avoid problems such as high interest. In doing this, we can also avoid other things and it includes late fees, disconnection fees and reconnection fees, eviction, repossession of items such as cars, and more. The little charges you receive monthly add up fast and you’ll never when it will drain your savings.
Use apps that tracks your money usage
With the rise of smartphones, there have been so many apps created for different purposes. You can check Google Playstore or Apple Store to check apps that can help in saving money or known as financial apps. These apps help make it easier to keep track of your cash inflow and outflow. Using financial apps, you can develop a spending plan and create a method in keeping tabs on how you’re spending your money. In this way, you can make changes on your spending habit, leading to more savings.
Be wise with excess cash usage
Have you received a bonus? How about a tax refund? It’s clear as crystal that you want to spend it on your WANTS because you think it is extra cash and you deserve to treat yourself. With your excess cash, you should not spend them all in one place. It’s really nice to have additional money in your bank but you must avoid overspending.
If you have the extra cash at hand, might as well put it in good use. If you have a list of priorities, maybe you can spend the extra money on it. One good example is paying any loan like cash loans and credit bills; doing this will have a good result on your credit score. Be responsible with your finances even with additional money.
Try the money jar
Aside from saving money on your bank savings account, you can also consider putting money on a jar. This may be a good start if you still don’t have your savings account. If you have spare change on a daily basis, put them on the jar. You can use it for small purchases or short-term goal. Any extra money you have, throw them into your money jar.
Save up for your retirement
You just don’t save for your emergency fund, you’re saving for your future needs: your retirement. If you work for an organization that offers retirement savings plan, grab the opportunity. But if you’re self-employed, make sure to set up our own retirement savings account.
Create an automated savings
One of the easiest ways to build your savings is to save money and that should be done automatically once you receive your salary. You can open a bank account where you can make a direct deposit of a portion of your salary. It can also be your emergency fund when rainy season comes. You can also set up an automatic transfer to your savings account every payroll. Make it a habit save monthly and don’t use the fund for your WANTS.
Make an investment
Saying money is important but making an investment is also vital. Making an investment ensures that your money grows over time. You can ask professional advice about this so you will have an investment strategy. Always make sure that a huge portion of your money goes to proper use. There are options in investment such as stocks and bonds.