Finance management is about knowing where your money comes from, limiting your expenses, and saving what’s left, instead of spending it purposelessly. Instead of wondering how to make extra money you need to be aware of the following money saving tips and finally take control of your financial future.
1. Set a budget
Budgeting is a key part of money saving. You need to track every dollar that comes to your bank account, and also see where it goes.
Such monitoring can be done on a weekly or even daily basis. Finalizing your monthly budget should lead to some powerful realizations, followed by firm decisions on what changes to make to how you’re spending and managing your money.
2. Make a plan
The next step is a savings plan. One way is to just set up an account and automate it so that a certain amount of money is transferred to it from your salary every month. While that will save you a lot of worries and you won’t end up forgetting about making a payment every month, it’s also not an easy thing to do if you’ve never saved before.
That’s because setting aside a percentage of your monthly income feels uncomfortable. You know pretty well how you can spend it on things you like. But it’s time to take your personal finances seriously.
3. Develop a money saving attitude
Change your mindset when it comes to money saving. Understand that this is the foundation of wealth. It’s something rich people have understood at a young age, and consider it the cornerstone of their financial success.
In fact, it’s what millionaires advice you to do, and they describe saving a fixed amount of money monthly as the act of paying yourself first.
This will change you and how you think about money in many ways. For a start, you’ll understand how wealth is accumulated by slowly adding small sums of money, that generate interest, and seeing how they grow over the years.
That also teaches you patience. Makes your financial future a priority and helps you be okay with taking more responsibility.
To stay motivated and on track, and decide to invest even more of your salary in this, you should monitor the growth of your savings.
4. Stick to the essentials
You’re spending more than you need to. Luckily, with some minor changes and a few new habits you’ll be good to go.
That too requires you to be writing down every expense on a daily basis. Then, analyze the results after you track this for a week or so, and see where you’re literally wasting your money.
That might be bottled water twice a day, or Sunday shopping, or drinking on a Friday night which turns into a long night out with spending a fortune while picking up girls in a club. It could be the 10 subscriptions you’ve forgotten about, the total sum of which, however, makes up for a big cost.
Start by identifying these little bad spending habits. Then take action about each, one at a time so you don’t feel overwhelmed.
If you do this right, you’ll quickly get back more of what you earn, instead of investing it in things that lead to no long-term value. If you’re smart enough, you’ll let these new funds coming in, be directly put into the newly opened savings account.
5. Take your savings seriously
Every now and then you’ll think about the amount of money just staying in a bank account, and imagine what you can do with it. It’s tempting to book a vacation to an exotic place, or buy an expensive gadget. But that will get you back in the beginning, when you couldn’t manage your money well and had financial problems.
To get out of debt, feel more confident, be able to live and sleep better knowing you’ve got it covered if something unexpected happens – all this will only be possible if you take your finance management skills seriously and brush up on them by becoming a money saving expert.
6. Last but not least, reward yourself
Let’s not forget the fun part. If we do, money saving can turn into a daunting activity that we feel negative about. That won’t lead to success in the long-run.
So, when you’ve been living frugally for a few weeks and stuck to the plan, go purchase something that will make your life more enjoyable and comfortable. But be sure that you want it. In fact, a good shopping tip is to give it some time when you fall in love with an item. After a week or so, if you still want it that bad, go ahead and invest money in it. This way you’ll appreciate it more.
Money saving can become your new hobby, passion and skill to master. You’ll be much happier knowing you’re doing something about your financial stability and that will boost your confidence. You’ll feel in control of anything else you do in life too.
Are you saving money on a regular basis? What other money saving tips have you heard of?