10 Simple Fool-Proof Ways To Save Your Hard Earned Money
10 Fool-Proof Ways To Save Money. Saving money is essential for everyone because the future is always uncertain. You may end up in an emergency where you’ll need a good amount of money, or you might end up with a fantastic opportunity to invest in.
The issue is, even though none of us can deny the merits of saving money, actually doing so is a tough job. But don’t worry, this is where we come in! Below, we’ve listed a few ways through which you can save money. Start scrolling, and soon enough, you won’t have to worry about not having money saved up!
1. Eliminate Debt
It’s challenging to save money in a fool-proof way when you’re still carrying around an enormous debt burden. So, to save money, you need to start by paying off your debt. The longer you put off paying off your debt, the more you’ll have to pay thanks to interest payments.
If you save money while you still have debt, the money you save won’t be used in emergencies because you’ll have to pay off your debt with it ultimately. Hence, once you’ve gotten rid of your debt, you can work on saving your money.
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2. Set Savings Goals
One of the most effective ways to save money is by having specific goals. If you know what you’re keeping your money for, then you’ll have something to push you forward and motivate you not to spend money.
For example, if you need to buy a car in 2 years or a house in 5 years, you can plan out how much money you will need to save each month, and the end goal will act as your driving force the whole time.
It’s always easier to accomplish a difficult task when you know why you’re doing it that way. Whenever you see yourself struggling to save money, remind yourself why you’re doing it in the first place. Without proper motivation, it’s easy to start spending all the money you save.
3. Pick The Right Tools
There are specific tools you can use to ensure that you save money. For short-term goals, you can use FDIC-insured deposit accounts. There are many types, such as a savings account or a Certificate of Deposit (CD), which locks in your money for a specific period and pays interest at a rate that’s usually higher than savings accounts.
On the other hand, for long-term goals, you can consider the following FDIC-insured individual retirement accounts (IRAs), which are tax-efficient savings accounts or securities, such as mutual funds or stocks. You can get these investment products through investment accounts with a broker-dealer.
However, you need to remember that the FDIC does not insure securities, nor are they deposits or other obligations of a bank. They are also not guaranteed by a bank either. They are subject to investment risks, one of which can be the possible loss of your principal.
Keep in mind that you don’t have to pick just one account. You should consider all of your options carefully and look at aspects such as fees, interest rates, and balance minimums to figure out which works best for you.
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4. Make Savings Automatic
Almost all banks provide the option of automated transfers between your checking and savings accounts. You can choose how, when, where, and how much to transfer money. You can even split your direct deposit so that a portion of every paycheck goes directly into your savings account.
These are simple ways to save money as once you sign up for this scheme, you no longer have to think about actively saving money. The bank will do all the work for you! Also, since you won’t have the money on you, it reduces your temptation to spend impulsively.
5. Find Ways To Cut Your Spending
If you feel like, you can’t save as much as you would like to, it might be time to look towards cutting down on expenditure. There are a bunch of little things you can do to cut down on your spending, which most of us never pay attention to.
There are a bunch of unnecessary expenses we have that can build up to a big amount without us realising it. You can identify various nonessentials that you can spend less money on, such as dining out and entertainment. You can also look for ways to save on your fixed monthly expenses such as your cell phone, internet, and television.
Some examples of ways you can cut down on everyday expenses are by cancelling subscriptions and memberships you no longer use, committing to eating out only once a month, and giving yourself a “cooling off” period. What is a cooling-off period, you ask? Well, if you are often tempted by a nonessential purchase, especially if it is expensive, wait a few days to see if you still want it later on. You might end up being glad that you passed it!
Consider other expenditures too. Do you need cable if you can stream shows online instead? And while you might have signed up for a mobile phone plan that makes a lot of financial sense to you, are you sure that you need everything it offers? Do you need all the minutes it is giving you? Do you need unlimited text messages, or can you get by with less? You can try cutting back to a less expensive plan and see how it works for you.
6. Budget For Savings
If you know what you spend in a month, you can begin organising your budget accordingly. All of your expenses should be added to a workable budget. Your budget should outline the way your costs measure up to your income so that you can plan your spending and make sure that overspending does not take place.
Make sure to factor in expenses that happen regularly, but not every month (e.g., car maintenance). One way to do this effectively is to have a savings category in your budget. Ideally, aim to save around 10 to 15 per cent of your income.
7. Use Cash
Credit cards might be extremely convenient and simple to use, but there is a catch – they’re exceptionally deceitful too. We use them very quickly without being considerate of the impact they might have on our finances.
If you stick to using cash, you can notice your wallet getting empty. That way, you will put in a more conscious effort to curb your spending. With credit cards, you aren’t mindful of how much you’re spending because you can’t physically see it.
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8. Unplug Electronics When You Are Not Using Them
This is a tip for saving money, which most of us are aware of but push aside. There are a few electronics that can use up a lot of energy even when they’re turned off, such as microwaves, heaters, and televisions.
When you’re about to sleep or go to work, you can make it a habit to unplug all the nonessentials in your household. This might not seem like a big step right now, but the money you can end up saving over a year can end up being a massive amount.
9. Save Your Windfalls
The terms windfall to save money refers to an amount of cash that you win or receive unexpectedly. A work bonus, inheritance money, or contest winnings, all count as windfalls. Since this is unexpected money, you don’t plan for it. Hence, you end up spending it on unnecessary things.
Usually, people spend windfalls on luxury things such as a shopping spree or eating out. Instead of spending this money extravagantly, choose to save it up. It may not seem like a small amount, but over a few years it can add up to a significant amount.
10. Give Yourself An Allowance
Saving money fool-proof doesn’t mean you have to restrict your lifestyle completely. You can set aside a bit of money for fun each month. The amount depends on your budget, but it can be handy to help you stay focused and reach your budgeting goals.
Budgeting for fun will help you save money as it will allow for a few splurges and prevent you from overspending. By giving yourself an allowance, you’ll also know exactly how much money you’re spending on personal expenses, allowing you to stay within your budget.
Conclusion
10 Fool-Proof Ways To Save Money. These are a few ways through which you can begin to save money. We know it’s not easy, and we understand the impulse to want to spend the money you have. But trust us, if you stay focused on saving your money, there will be a day when you will be extremely grateful for having saved up as much as you did! You never know when you might need some money for something important. Save up now and have no regrets later on. Good luck!
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Fun Fact
What's the 30 day rule with money?
When you see something you want, wait 30 days before buying it. If you still want the item after 30 days, move forward with the purchase. If you forget about it or discover that you don’t need it, you will save money.
