January isn’t over and we believe you’ve not spent every bit of your salary already. This is great because you still have time to make and maintain a resolution.
If you’re someone who has just started earning money, you’ve definitely been spending it all up. It is funny how we live on pocket money for years, and one fine month even hundreds of dollars aren’t enough.
Well, if you’ve followed the same routine for quite some time now, we suggest you some changes for the better. Check out some easy tips that you can follow this year to save up money for the better.
Why save money?
The header might seem quite stupid to many because we all know why we need savings. However, even a millennial that is definite about the growth and stagnancy of a new job needs to start saving. It is smart to start with the first salary, but if you haven’t then you can start with this month.
Savings is primarily important because a paycheck doesn’t make you rich. The money that you save can make you rich month by month, and the preparation for savings is a month-long process. Check out the tips below to know how you can go about it.
- Put it aside
Every time you earn your paycheck, take out 10% of the total amount and add it to direct savings. It should be an amount that you never touch. Even in your direst times, you must sustain with what you have. This kind of savings will help you fall back on something when you don’t have an income.
In today’s world, losing a job is no surprise. You must have at least $500 saved up in your bank to not touch it at any cost. After you’ve made this amount you can go lenient with your savings. For example, save 8% on your salary and save 2% for travel or something you want to buy.
- Save on shopping
If you usually go to the supermarket and buy your monthly grocery, you might find yourself overindulged. For example, when you head to a supermarket, you don’t just buy the things you need but also the things that appeal to your eyes. If you carry a list of products you genuinely need, you can prevent excess expenditure. This will help you go with a budget of $100 and return with $10 for saving. You can then add that to your savings bank to help it grow.
- Make changes in your lifestyle
If you’re planning to really cut down on cost and have a bigger goal, you can make some drastic changes. For example, if you’re a gym brat but you want to save up on your monthly subscription, you can try out home exercises for a few months.
You could also cut down on unnecessary cloth and extravagant eating options – these are usually places where we tend to spend a lot. You can also refrain from using too much electronics, make sure to switch off fans and lights when not in need and walk a little more to save petrol.
- Stick to a budget
It is essential to make a budget that lets you stick to a certain amount you know you can’t exceed. Telling yourself that it is the maximum you can spend is the perfect way of ensuring that you don’t use more than you should.
When you have a budget, you know how much you can spend on every category. For example, you will have a set amount kept for the week-long expense and manage within that. You also know the fixed and variable costs like rent and electricity that you can keep aside. Having a list and following a budget always helps you save more.
- Never use the note
Make a fun deal with yourself when you choose a note that you’d never use. Say, you choose $20 note and every time you get it from the bank or in exchange, you don’t use it. You keep away every $20 note that you get and have a separate place for saving that. One day you’d find that cash pile up to a good amount and you can buy your favorites things. You can even do this for coins – simply don’t use coins and save them.
- Plan for a big investment
Many times it is tough for people to save money in the bank. You have all your apps connected and every time you feel like buying something, you can’t control temptation. If you create a goal to buy a house or precious metals within a certain amount of months, it can keep you away from unnecessary expenses. You will love to save and have your goals sorted and be more focused that way. Having aims are important to help you save more.
- Keep cards away
Make sure you have two bank accounts – one where your salary gets credited and one where you can save. Don’t keep a debit card for the savings bank account as you just add money there. Keep it only for savings you’d find yourself not thinking about it at all.
- Don’t use credit cards
No matter how eligible you are for credit cards, they are the worst financial habits to engage with. Don’t let yourself fall into the trap of credit cards as paying off becomes extremely tough. You need to stick to your budget and spend as much as you can allow yourself. Once you follow all the tips above, you’d know that owning a credit card doesn’t stand a chance. The best you can do to yourself is get rid of the one you own.
There can be times when you want to spend on materials you like or on travel. You must let yourself indulge a little here and there, as long as you don’t need to touch your minimal savings. Follow these tips and you’re on your way to get rich.