Are you finding it difficult to save money? Tired of living paycheck to paycheck and not setting aside any “rainy day” money, investing, or contributing to retirement or college funds? Finances can often seem overwhelming, but saving money doesn’t have to be rocket science. In fact, with these simple money saving tips, you should be able to build up a sizable savings account in no time.
Money Saving Tips
Your first step, without a doubt, is to take a good look at how you (and your family) are spending your money. For the next 30 days, keep a journal of every dollar you spend (save receipts if need be). If you fill up your tank, grab a soda, or pay a bill, write it down. Odds are you will be surprised at the amount of money you spend on non-essentials everyday. That dollar here and dollar there quickly adds up.
Once you have a log of the past month, the real work begins. That overall picture will tell you instantly places that you can trim to save money. For instance, maybe you purchase three bottles of water a day at a dollar each. Over the course of a month, that is nearly $100. Buying a water bottle with a filter and refilling it would save you a lot of money – and is better for the environment. That $100 a month equates to $1200 a year alone. Food for thought!
Don’t Be Too Frugal
One big mistake fledgling money savers make is being too frugal and never spending money on anything that isn’t necessary. Saving money is great, but every once in a while be sure to treat yourself. After all, if all you work for is to save money, you will quickly become demotivated. This is especially true for freelancers and business owners.
You don’t need to go overboard, but a new purse, a new tie, or taking the family out to a nice dinner every so often will do wonders for your morale.
Pay with Cash
Where possible, always pay with cash. This serves a few purposes. First, it forces you to spend within your means. Second, it lets you avoid credit card fees and interest rates. Finally, paying with cash gives you goals, as we address in the next section.
Set Realistic Goals
In addition to long term goals (retirement, college, rainy-day funds), mark down other realistic goals. Need a new washing machine or jonesing for a giant screen television? Setting goals for items that are more readily attainable, alongside the long-term, less physically tangible goals helps you keep your eye on the prize while rewarding yourself periodically along the way.
Pay Down Debt
A really simple way to save money is to pay off debt – it puts more money in your pocket each month and saves you interest rates in the long term. If you have multiple credit cards, start buy making an effort to pay off the smallest amount first. Then, apply the money you used to pay on that card to the next highest amount, and so forth. Before you know it, you will have paid off all of your credit cards and not only will you have more money in your pocket each month, but you won’t have the stress of debt looming over your head.