Saving is similar to dieting in that it is not always fun, but if you keep the end goal in mind and apply some control, you may succeed. With dieting, you create a food plan; with saving, you create a budget. The goals may appear to be diametrically opposed, since dieting aims to make you slimmer while saving aims to make your bank account fatter; nonetheless, both need a leaner, more disciplined attitude to daily living.
You may keep track of your spending on your computer or laptop, or you can use an app on your phone. If you don’t have a budgeting gadget, utilize an old-fashioned ledger and write everything down. Make a list of everything you need to spend money on, including the occasional night out, entertainment, vehicle and house upkeep, and so on.
Savings should be a budget line item. Decide how much you can spend on each item and stay to that amount; but, don’t take out everything and make your life so terrible and monotonous that you can’t possible stick to your budget.
At least 10% of each paycheck should be deposited into a savings account. While certain expenditures, such as rent or mortgage payments, cannot be avoided, others, such as food, fuel, restaurants, entertainment, and electronic devices, can be reduced. While the automobile only requires maintenance every three to six months, you should set aside some money each week so that when maintenance difficulties arise, you have the funds to address them without depleting your savings. The same is true for housekeeping.
Avoid frequent eating out
Eating out every now and then is OK – everyone needs a change or a break from cooking – but don’t eat out every night or the bulk of the week. You’re wasting your money at that point, and you might be eating much better at home. Movie rentals, Netflix, concerts, sporting events, and comedy performances are all excellent methods to retain your sanity and unwind. You work hard throughout the week, and you should be allowed to enjoy your life and the money you earn; just don’t spend half of your salary at one location.
Finally, if you have a few hundred dollars left over at the end of the month, there’s no need to look for a reason to spend it. It is not necessary to constantly upgrade your phones, tablets, computers, computer displays, televisions, iPods, and other gadgets to the current generation of technology. The greatest sense of security you will have is knowing that no matter what crisis or catastrophe comes your way, you have the financial resources to survive and conquer it.
If your net biweekly paycheck is $2,000, put $200 in a savings account and forget about it. Rather of budgeting $2,000, consider budgeting $1,800. It may be uncomfortable at first, but once you start seeing results, such as your bank account expanding and your financial condition improving, the sacrifices will be worth it. Consider how much you should be saving each month and then put the best techniques to save money into action.
Read also: 9 Crafty Ways to Save Money for Travel
Review Spending on Luxuries
Is it really necessary to get cable or satellite TV? You may access the same programs online the next day, or you can just download them and save money on cable. If you adore your cable, look into other providers in your region to see if you can locate a more affordable package. Consider combining internet, cable, and home phone. Even if you never use your house phone, getting the bundle may be less expensive. In the spirit of phones, take a look at your cell phone plan. Do you use all of the services for which you pay? Can you save money by switching to a less expensive plan that works for you? When negotiating offers with the customer support person, make sure to bring up other firms’ promos and discounts.
If you rent a lot of movies and never have the chance to watch them, start by not renting them at all. We all have one friend with an extensive movie collection – ask him/her to borrow a DVD or Blu-Ray disc once in a while. Most public libraries even have a movie section and you can check out the movies for free. Although saving $10 per month is not going to fund your retirement, this is an example of you recognizing your own wasteful spending and trying to execute on a plan to save more.
If you need a grown-ups night, consider inviting friends over to play cards, socialize, or barbecue instead of going out to dinner, a movie, club or bar. If you and your friends take turns visiting each other’s homes or apartments, you will all save money and have a great time.
Read also: 10 Ways to Save Money on High End Clothing
Pick up food
Delivery of pizza, Chinese cuisine, or any other restaurant is handy, but you can always pick up your own food and avoid the delivery fee plus tip. Even if you purchase online to take advantage of special offers, you may still pick up and save money. If the restaurant is a little out of the way, try scheduling an errand in the neighborhood to increase your efficiency and productivity.
If you are serious about purchasing anything, wait a week to see if you still want it. Never purchase anything you don’t truly need just because it’s on sale. More money is spent on impulse purchases than most people realize.
It is easier said than done to refrain from purchasing items that you do not require. Most Americans struggle to distinguish between reasonable and irrational demands and desires.
Read also: When Spending Money Stops Tasting Good
For example, I’ve been wanting to update my first-generation iPad for about two years, but every time Apple releases a new product, I realize that the new devices would not provide a significantly enhanced user experience, given what I use my existing iPad for. Do I really need another technical platform to browse the internet, check my email, watch movies or videos, listen to music, or connect with pals when I already have a laptop, PC, and smartphone? If you are honest and critical of yourself and your judgments, you will almost certainly never have buyer’s regret.
Use tap water
Bottled water is expensive and the truth is that most companies simply filter tap water and fill plastic bottles. That “awkward” or “disgusting” taste is not that your tap water is dirty, but is a result of minerals and chlorine in your water. The sanitation districts and municipalities in most American cities do an outstanding job of cleaning and filtering water, but because these minerals are not harmful to your health, they do not spend the extra money to remove them. If you do not like the taste, buy a Brita Water Filter and that should take care of it. If your refrigerator has a water dispenser, it may also have a filter, or you can buy a filter for your kitchen faucet and fill re-usable water bottles or glasses. This saves money and the environment.
Make coffee at home
While premium coffees such as Starbucks, Pete’s Coffee, and Coffee Bean are delicious, the majority of coffees provided are also high in sugar, calories, and/or cost. Making coffee at home and bringing it with you in a reusable to-go cup may save you up to $2.50 per day, $12.50 per week, or more than $500 per year. If you add artificial sweetener in your own coffee, you may lose a few pounds as well. Win-win. Though we don’t believe the little expenses are really the issues that prevent you from becoming a millionaire, the discipline you learn starting from the small stuff can lead to wiser spending when it comes to the big stuff, such as homes, cars, TVs, etc.
Cutting back on luxuries does not require you to forego a romantic meal for your anniversary or birthday, or to stop celebrating special events, but being conscious of how much you spend on non-essentials may help you budget properly and save money. It also makes important events seem more special when a night out on the town is a pleasure that does not end in buyer’s regret.
Paying off high-interest credit cards as soon as possible is an essential location to save. If you use credit cards, only charge what you can afford to pay off at the end of the month. This can save you hundreds, if not thousands, of dollars in interest payments.
Plan Shopping Trips
If you’re like most people, you’re constantly out of milk, bread, cereal, toilet paper, or some other necessary, and instead of standing in line at the grocery store, you just stop by the convenience store on the corner to get what you need. Convenience is costly and a luxury. It may not appear to be a huge issue, but if you make that trade off once a week, you will have paid an extra $52 on milk in a year. Add in a candy bar, a soft drink, or other impulsive purchases, and the total can easily reach three or four digits.
Keep note of how much milk, bread, eggs, or other necessities you use in a week to avoid unnecessary excursions. Make a grocery list of everything you’ll need for the week and go shopping in one go. Not only do you save money on groceries, but you also save gas and time. Remember that your time has a monetary value as well – going around grocery shops three times a week when you might be sleeping, spending time with your children and family, enjoying a pastime, or learning a new skill like blogging is simply a waste of your time. If you do run out of anything, go to the grocery store and utilize the self-service or fast lane.
Brown Bag Lunches
While making lunches might be time-consuming, you can save a lot of money if you and your spouse buy from restaurants or cafeterias near your workplace. You may probably save at least half the expense of eating out by making meals at home. If you and your spouse both spend $10.00 on lunch, carrying your lunch to work saves you $50.00 each week, or more than $2,500 over the course of a year. Even if you can’t save money, consider the long-term benefits to your health, self-esteem, and gym membership costs.
Breakfast and lunch at school can also be costly if you have children. In terms of breakfast, a bowl of cereal with milk is much less expensive than $2 to $3 school lunches and takes only minutes to prepare. Furthermore, the typical cost of a school lunch in America is around $2.30 for elementary school kids, $2.50 for middle school students, and almost $3 for high school students, and this is only for the basic cafeteria cuisine. With Frito pies, chicken fingers, burgers, fries, chips, and/or a drink, you’re probably looking at at least $5. If you consider the nutritional worth of the meals your children consume, you’d be better off packing them a pound of bacon and sending them on their way to school and, in the future, the doctor’s office.
Buy Generic and Store Brands
Generic and store brands are usually the same quality as name brands, but you aren’t paying for advertising, fancy packaging or other costs. Grocery chains like Kroger and ShopRite buy their store brands from large companies like Ralston Purina, Bird’s Eye and Green Giant and the companies put their own store labels on the products. It is the same stuff inside with a different label outside. The same goes for Costco’s Kirkland, Sam’s Club and Sam’s Choice, and Walmart’s Great Value brand.
It doesn’t hurt to try store brands and it can save you a bundle. There may be some items, like coffee, peanut butter or mayonnaise, that don’t taste the same as the brand you normally use, so if you prefer a few name brand items, look for sales and coupons and buy extra jars or cans when you find low prices. If you spend $10 less each week for groceries, you will have saved $520 per year, and really, saving $10 is easy.
Non-food items like cleaning products, personal care products and toilet tissue are usually cheaper at dollar and discount stores than at grocery stores. With dollar store deals, it is usually better to buy name brands even if off label products are cheaper since the cleaning products may be diluted and the paper products are often sold in smaller rolls or are of lower quality than brands you know. These products usually last longer than ones found at grocery stores, so one trip a month to the discount store should be enough.
Pharmaceuticals and over-the-counter medications
Most Americans are unaware that the FDA mandates generic versions of name brand pharmaceuticals, including infant formula, to provide customers with the same health advantages as their brand-name equivalents. Instead of investing millions or billions of dollars on marketing efforts and R&D, generic pharmaceutical businesses pass the savings on to customers while providing the same components as brand-name pharmaceuticals.
Whether you use a prescription drug on a regular basis, check with your doctor to see if there is a generic replacement. If no replacement is available, try getting your prescription from an online pharmacy. My friend’s kid takes Advair on a regular basis for asthma, and her monthly prescription is $240. She may purchase a three-month supply of Advair for $240 through an internet pharmacy, a 66 percent discount. You probably won’t be able to save this method if your health insurance covers your medicine.
Over-the-counter drugs may be costly, especially if you take them on a daily basis. While most people buy generic aspirin, many individuals prefer name brands when it comes to ibuprofen, acetaminophen, or naproxen sodium.
Store brands of these popular analgesics are equally as effective as branded brands. When it comes to substances and doses, there is no difference except for price. Store brands are sometimes up to a dollar less expensive. The same is true for over-the-counter drugs such as decongestants and cough syrups.
Lastly, let’s discuss cigarettes and I’ll be brief about it because, let’s face it, if you don’t want to quit, some guy telling you to quit and save money over the internet isn’t going to result in that epiphany. Nonetheless, with cigarette prices and taxes resulting in a pack costing $5 to $10, depending on where you live in the United States, pack-a-day-smokers could save between $1,800 and $3,600 a year. If you add in the extra costs associated with smoking, such as increases in life and health insurance premiums, lighters, ash trays, gum and mints, unnecessary stops at the gas station, excessive teeth whitening and mouthwash, dry cleaning, and the ridiculous medical bills of the future, you are literally talking about hundreds of thousands of dollars over your lifetime.
Buy A Fuel Efficient Car
If you do the arithmetic, you’ll discover that if you replace your 20-mpg car with a 30-mpg car and drive the American average of 15,000 miles per year, you’ll save 250 gallons of petrol. At $4.00 per gallon, that’s $1,000 per year. Before you go out and buy a brand new automobile, keep in mind that new cars often lose 25% to 40% of their value in the first two years. Someone else bears the loss if you buy a two-year-old automobile. Because a used automobile is less expensive, you save money on financing and have cheaper insurance rates owing to the lower cash value.
To get the most out of your fuel-efficient vehicle and save money on petrol, adhere to recommended maintenance schedules for oil changes and tune-ups, as well as maintain the tyres properly inflated. Underinflated tyres not only wear out faster, but they also reduce your car’s gas efficiency. To get the most out of your tyres and gas, acquire a cheap tyre gauge from an auto parts store and check your tyre pressure monthly.
Saving and Investing
The first goal of your savings plan is to accumulate between 6 and 12 months expenses in your account. This is your financial parachute that will protect you and your family in case of an emergency, such as a job loss, injury, medical bills, litigation, natural disaster, etc. This money stays in a savings account or invested in some type of short term security so it is liquid and easily accessible.
Once you have ensured your short term financial stability, it is time to look at investments that have a higher return than bank interest. Secure and safe investments include certificates of deposit, high yield bank accounts, Treasury bonds, municipal bonds, investment grade corporate bonds. Certificates of deposit can be bought in 3, 6, 12, 36, 48 and 60 month increments. The longer the CD takes to mature the higher the interest rate. Penalties for early withdrawal can be stiff, so it may be best to start with several different CDs, like a 3 month, a 6 month and a 12 month, but we would not recommend a long term investment in CD’s at current yields because interest rates are depressed. When the CD matures you can roll it over or take out the interest and reinvest the initial money.
For the foreseeable future, equities seem to be the best investment. Though the subject requires a lengthy article to cover the pros and cons of investing in the stock market and the many strategies available today, it is my opinion that the greatest returns in the next few years will likely be generated from retirement accounts, such as 401Ks and IRAs, and self-managed portfolios invested in stocks. If you have some investment knowledge, you can pick your own stocks, or simply choose a passive index fund or ETF from Vanguard or Fidelity.
Once you save enough money, you can put your money to work for you instead of working for your money. While no one enjoys making sacrifices, with a few small changes, you can get thinner and richer at the same time.