The Everyday Person’s Guide to Saving Money
Are you just entering the world of personal finance or looking for a new solution to your budgeting problem? Don’t fret! Here are the most important steps you can take to become financially independent and save up as much as possible.
Create A Budget
Granted you still haven’t created a sturdy budget, it’s obvious why you find it hard to save money. The first step to saving is adopting a budget and adjusting it to perfection. In reality, it’s not that hard. You're not changing your way of living, instead organizing what you already live with.
First, you figure out how much you make every month, minus the taxes. Second, you calculate all your monthly expenses, including rent, bills, transportation, groceries, savings, and so on.
After you created a list of your monthly expenses, figure out which ones are fixed (like rent and insurance) and which ones are variable (like miscellaneous items and eating in restaurants). Find an average monthly cost for each expense on the list and then make adjustments accordingly to the budgeting method you pick. The most popular methods are:
● incremental budgeting;
● zero-based budgeting;
● activity-based budgeting;
● value proportion budgeting;
● flexible budgeting.
Since you’re trying out a new method of personal finance, make sure to manage your budget every quarter or so to see if it’s working in your favor. Now, you’re ready to take the next steps toward saving more!
Let’s set the record straight: you won’t be able to save consistently if you’re not motivated enough. What will motivate anyone who wants to save money? A goal! Of course, your goal will be completely personal, like your budget.
If your goal is big and seems unattainable, put down a few saving targets to make it a bit easier. Be it a house or a car, calculate all the additional expenses and then see how much you need to save each month.
One of the most important tips to save money also includes taking care of your debt. Sure, that sounds more complicated than visualizing your goal, but important nonetheless! Monthly debt practically sucks the available funds out of your pocket, leaving it completely empty.
So, how does one get rid of their debt? The snowball method. Start from the smallest debt and finish by paying off the largest one. That way, smaller payments won’t eat up all your money monthly. The moment you eliminate that debt, you can put more money towards your saving goal.
Use Cash Back And Coupons
Now, to more practical tips for daily life! Once you decide to save up on your day-to-day transactions, cashback credit cards and coupons will be your first aid. Sure, coupons can be scary at first. When you grow up and start financing, though, nothing compares to the 50% off the item you’ve been dying to get!
Then, install all the cashback apps and extensions that let you receive a few percent back after a grocery shopping trip. To go even further, use a cash-back credit card. Some of them offer up to 6% cash back at times! Just don't forget about the bill, or you'll have to pay off interest.
Look For Ways To Earn More
When you earn more, you save more. In case you have a fruitful skill you can sell or an hour of free time every day, there are a few ways to earn more.
Freelancing. Being a freelancer means you can pick working hours and take up as much work as you desire. Whether you're an IT specialist, a web designer, an artist, or like managing social media, you can turn all of it into a freelance career.
Micro tasks. Don’t want to have the same career as you do for your full-time job? Don’t worry; you can do any other micro tasks! While you can find them online, plenty of micro jobs are waiting for you offline. For example, become a dog walker, a handyman, or even a gardener in your free time.
Sharing internet. Most people have more than enough internet bandwidth to use at home. Why not share yours? Companies and individuals will use your excessive internet connection for their personal means after paying you a fee. Every month, you can make up to $75 just by running a background app on your PC.
Here they are – the most important tips to save money. After implementing these into your daily life, you’re guaranteed to understand your financial situation better and start saving smart. Good luck!