Everybody knows that money is an important part of our lives. As a legal medium of exchange, humans need money to survive. Therefore, we need to use money wisely regardless of how much of it that we own. However, it is not a rare case in our society that people still feel like they don’t have enough money although they have quite a huge income from their jobs. To overcome such issues, we need to learn how to manage our money properly. And one of the easiest ways to do that is by setting aside some of our money for savings. Unfortunately, a lot of people find it quite difficult to do that. They often end up spending a lot more than they originally intended to. That’s why we have compiled these 8 saving tips that you can try to do from now on.
You must remember that these saving tips will work if you have the strong will to control your desires. Also, consistency is definitely required for you to succeed in this. Now, let’s check out all the 8 saving tips in the following list below!
1. Separate wants from needs
First things first, you need to separate your wants from your needs. The easiest way to do this is by creating a priority list. Put all the important needs that should be fulfilled first on the top of the list, then continue by putting the less important on the lower part of the list. After that, you can list down the items that you simply want but do not really need them. By doing this, you will have an estimation of how much money to spend in one month reasonably. Out of all these saving tips, this one might seem very simple but it can be very helpful when you realize how much money you can actually save when you only buy the stuff you need.
2. Use the principle “save first, spend later”
All the saving tips that we have gathered for you might not work if you don’t have a strong principle and will to start saving your money. That’s why you need to build the basic principle to save your money first before spending it. Every time you receive your paycheck, make sure to calculate the percentage of money that you should save. Generally, according to the popular 50/30/20 rule, it would be ideal if you can save 20% of your income every month. After that, you can spend 50% of your budget on essential necessities and reserve the last 30% for discretionary spending. By following this rule consistently, you’ll be able to save money more consistently.
3. Record your expenses
This is one of the most crucial saving tips that you might want to follow. When you keep the track of what is coming and what is going out, you have more prominent control over your financial condition. Oftentimes, when people don’t record their expenses, they seem to forget or confuse about where did their money go and for what purpose. And this thing is what makes saving money even more difficult to do, especially when it becomes a habit already. Nevertheless, you can solve this problem by taking notes of where and what you have spent your money on. Recording your expenses will make you fully aware of how much money you have spent. Later, it’ll be easier for you to calculate your spending and decide how much money should go into your savings account.
4. Set clear saving goals as a motivation to save more
People often overlook one of the simplest saving tips: setting clear saving goals. This might seem like an insignificant tip, but clear goals play a huge part in encouraging you to save more money. If you only save money without knowing the purpose of doing that, you might underestimate your way to spend money without control. However, when you have clear goals, the way you look at money most likely would be changing. You will rethink every decision you are going to make when it comes to spending money. Those goals could motivate you to save more because you know exactly what you want with the money later.
5. Establish your budget for everything
The next very important saving tips is establishing your budget for everything. This might look like a lot of work, but once you start and make this tip a habit, you’ll be surprised by the amount of money you can save every month. For starters, you determine how much money you should spend on breakfast, lunch, and dinner. Furthermore, you can do the same thing for your fare transport to and from work. In addition, you can also set a tight budget for entertainment purposes on the weekend. By establishing your budget, you will have more control before you decide to spend your money because you have already set the standard yourself.
6. Don’t pay your bills using a credit card
Most people think using a credit card to pay bills will simplify their life. While at some point it may be true, uncontrolled credit card usage could lead to dissipation. Because usually, you don’t feel like you’re spending money at all while paying with credit cards. Later, you find out that your monthly payments in the future rapidly increased due to the excessive usage of your card. If this is continued in a long term, you will find it harder to save money. So, starting from now on, try to pay your bills by cash or your debit card, so you’ll be more aware of your spending.
7. Pay off your debts
Many people don’t realize this, but debts are one of the things that make saving money seems hard. Especially because debts usually include interest, and the amount of money that needs to be paid is actually bigger than the amount that you borrowed. Rather than lingering and extending the installment period to pay your debts, it would be better if you could pay off your debts as soon as possible. When all your debts are eventually eliminated, it will be far easier for you to put your money into savings.
8. Downgrade your services
This might be hard at the beginning since this is strongly related to your daily lifestyle. However, downgrading your services is one of the most effective saving tips for everyone to save more money. You can cut unnecessary subscriptions, or try to cut down on take-out ordering since it is more pricey compared to when you cook the meal yourself. If it’s possible, try to use a fan instead of air-conditioning to reduce electricity bills. Doing this in a long term can result in you paying less for monthly services and saving more money.
Those are all the saving tips that you can try to follow in your day-to-day life. If you manage to follow one or two or more of these tips, you should be able to save a lot amount of money more than you thought you ever could. Also, you need to remember that consistency and persistency are very important in this money-saving matter.