There are simple ways to save money that will make a big difference in your bank account. After reading articles from MoneySmart and Investopedia, I realised there are many ways we can save money and achieve our goals. Whether we are saving for a family vacation, buying a new car, retiring, or putting a down payment for a new house.
First things first, pay your debt.
Put some money towards paying off your credit cards and some into your savings account. It does not make sense to pay over 15% interest on credit cards and earn only 1% or less in a savings account.
If you pay your debts, you will soon have more money in your savings.
Budgeting: Plan where your money goes
If you don’t know how to save money, creating a budget could be beneficial.
Setting a budget will help you to know what you have available for your financial goals. You need to know how much you spend every day. For example, groceries, house bills, public transport, and everything else. Once you know your expenses, you can figure out how much you can put away and save.
Setting specific financial goals will assist you in developing a solid savings plan. It can also help you adjust your budget to save extra money or encourage you to change your lifestyle.
Control your Spending
People discover that they are wasting money on things that they don’t need and could live without. Whether it’s a week or a month, keep track of every dollar you spend during that time. You can keep track of your expenses with a notebook or an app like Wally.
In fact, some apps will save for you.
For example, The Acorns app links to your credit card and invests your spare change. It rounds up your purchases to the nearest dollar and invests the difference.
Divide and Automate your Savings
Having an online savings account is a great way to grow your money. It’s harder to use money from a savings account because you can’t spend from it like you can with a transaction account.
Automate your Savings
Put aside some of your income in an account for savings. You can set up a direct debit on your own or have your employer do it.
Round-up Transactions
Your daily transactions can be rounded up to the nearest $1 or $5 using some apps or savings accounts. Your savings account receives the change right away. For example, if you buy a cup of coffee every morning,
- The coffee costs $4.5.
- Your account is debited $5.
- 50 cents goes straight into his online savings account.
- You will have saved a bit over $180 after a year.
Identify Ways to Cut Costs
Take a look at your spending to see where you can cut costs or negotiate a better price. It may surprise you how little things add up.
Look at your credit card or bank statements from the previous two months. Identify anything that isn’t important. This might include things like memberships or subscriptions.
- Cut back on your grocery expenses. Plan your weekly meals and buy in bulk, buy on specials and seasonal. Eat less meat and grow your own vegetables.
- Reduce your electricity bills. Turn off your appliances when not in use. Use energy-efficient appliances, and only heat or cool the room you are actually using.
- Change to less expensive options. Look for free streaming channels or apps. Instead of taking public transportation, look at car-pooling, or riding your bike.
- Look around for better offers. Use a coupon code, shop on the right day, and find free Shipping.