Saving money can be such a challenge, especially when there are so many things we need to pay for on a daily basis. It’s important to remember that, even though we need money in order to live, money isn’t everything. It’s much more important to be healthy and happy. However, money often contributes to our happiness as it equals security. When we fancy a weekend getaway after a stressful week at work, we need money to be able to go. If it’s imperative we get a new laptop for work or our studies, we need money to be able to buy it. If our clothes are falling apart after years of wear and tear – you guessed it – we need money so we can purchase new ones. But, what do you do when you’re working extremely hard to earn your monthly income, and it’s a decent income, but it all seems to be disappearing so quickly? Here are 5 of our best money saving tips to help you get back on the right track.
If you haven’t already, start an Excel spreadsheet where you list all your outgoing bills per month. Work out your total income, after tax, and then deduct all your expenses. This is how much disposable income you have to play with every month, and it’s imperative that you never go over this amount before your next pay cheque. You’re free to spend 90% of it, just make sure you leave 10% as leeway in case of emergencies.
Once you have a good idea of your monthly expenses and how much income is disposable, then you can work out how much you can put aside each month for saving purposes. Whether you’re saving for a specific reason, like a new house, or you want some kind of safety net just in case you ever lose your job – it is smart to save. If you don’t have much disposable income left after your expenses, then don’t feel pressured to save a big amount. It could be as little as $50; basically, it’s just anything you can afford to spare. It soon adds up – for example, that $50 turns into $600 after just one year of saving.
Once you know how much you’re saving every month, open a separate account with your bank where you can keep all this money in one place. This could be an ISA, or even an e-ISA – which can only be managed online. If you separate your savings from your current account, which contains your disposable income, then you will be less tempted to touch it for that new phone you’ve been thinking of getting or that new pair of shoes.
After tracking your expenditure for a couple of months, and putting a set amount of money in your savings account, you can start to track where you’re going wrong spending-wise. Have a look at your disposable income expenditure and identify the key trends as to where you’re spending the most. Is it on clothes? DVD’s? Nights out on the town? Try to cut down your shopping, or drinking, time – or allow yourself a certain budget per month which you are permitted to spend on your vices.
If you are one of these big-spender types, and you’ve identified where you’re going wrong, then the trick is to spend less by shopping around for bargains. If you really want or need that MacBook, then don’t just buy the first one you see. Spend time looking around the shops, as well as online, to get the best deals. Once you’ve done all the research, you can make a well-informed decision and allow the money you’ve budgeted per month for your vices to stretch even further.
Saving money is a lot easier said than done, especially when the cost of living seems to be increasing. However, if you incorporate one, some, or all of these tips to help you with your everyday finances – then you may just find that you’re left with a bit of extra cash in your pocket!