Saving money sounds easy enough – just spend less – but putting it in practice can be a challenge.
If your goal is to save money for something specific, a home, a trip, a new car or to create an emergency savings fund, then you need to set realistic money goals that you are able to reach. There are steps to take to make saving money a little easier.
Here are some money-saving tips to getting the most out of each paycheck:
Create an emergency savings fund
Ideally, your emergency fund should contain enough money for you to survive on for at least six months. Finances may be tight, but you’ll be grateful for the financial buffer if you suddenly lose your job or are unable to work for a length of time. Start contributing to this emergency fund as soon as possible, even if you are only able to make small deposits until you pay down your debt.
Eliminate debt
The quickest way to save money is to free yourself from your existing debt. Once you pay off your debt, you can direct those funds, along with the interest you’ve been paying, directly to your savings account. If you carry a balance on your credit cards, call the companies and find out if they’ll lower your interest rate or you’ll transfer your balance to a card with a lower interest rate and close the account. If the customer service representative won’t help you, ask to speak to a supervisor.
Set your financial goals
If you hope to purchase your first home, find out how much your down payment would be and set a goal of when you hope to purchase your home. If you are saving for retirement, you’ll need to know how much you need to live comfortably when you are no longer working. Break these financial goals down to figure how much you need to save each week, month or each paycheck to achieve them within your time frame.
Write down all your expenses
To save money, you need to find out where it is going. Buy a small notebook and keep it with you to keep track of all your expenses, even small purchases. You also can download apps on your Smartphone that will make it easy to track and categorize expenses.
Curb your spending habits
This may be a tough one. Look over the last couple of months of expenses and figure out where your money is going. There are probably many obvious cuts you can make, but tough decisions lie ahead. You will need to prioritize how you want to spend your money.
Sell your stuff
Clean out your closets and host a garage sale or sell your unwanted stuff on Craigslist. Your clothing can be sold in a consignment shop, or donate it all to a charity for the tax deduction. It’s a great way to eliminate clutter, and make some extra money that can either be used to pay down debt or build your savings.
Make meals at home
By spending a little more time in the kitchen you will save money, rather than buying convenience foods or stopping by a nearby fast food restaurant on your way home from work. Every trip adds up.
Drink more water
If you’re a diehard soda drinker, cut out the expensive and unhealthy habit by drinking more water. Instead of stopping by your nearby coffee shop for an overpriced cup of gourmet coffee, make your own or make it a once-a-month treat, rather than part of your daily routine.
Simple lifestyle changes can bring you much closer to your financial goals than you may realize.
