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The most important money-saving tip is to have the right mindset. Saving money involves discipline and goal-setting skills, so get ready.
In order to build a nest egg, you need to change your relationship with money.
Decide what it is that you are saving for and move forward with a plan.
It may take some time to get use to these adjustments, but the results will be well worth it.
Live Within Your Means
Set a budget – Budgeting is by far a rule of thumb when it comes to saving money. This doesn’t have to be a complex project.
Make a list of all your necessities with an amount next to them. Be sure to create a breakdown of these expenses and only spend what is listed.
Make sure that you prioritize your list and are spending only what is necessary to get through the week. Any money that is leftover before the next paycheck can be put into your savings account.
According to Investopedia.com, a monthly rent or house payment amount should be no more than 30% of your yearly income.
This means that a household that makes $100,000 should spend no more than $2500 per month.
According to Mr. Ramsey, if it isn’t possible to pay cash for a new car then wait until you can.
His solution: purchase a cheaper car with cash for around $2000. Use this car to get around as you save the money you would have spent on a car note. Then, use the money saved to purchase the new car.
His logic is not only intelligent but practical. Financing a car, which loses full value once you drive it off the lot, doesn’t make good financial sense.
Don’t Fall Victim to Sales Offers
We see them all the time in media, in our email boxes, and as we drive down the street. Endless products from retailers that are being offered on sale.
“Buy One Get One Free” “Buy Now and Get Free Shipping”
Sales offers are designed to get you to spend money. Some ads are so good that they can have you feeling as if can’t live without their product.
The truth is, if you are looking to save money, then you need to stop spending money, period.
Now is the time to tighten up on extra expenditures and buckle down to the necessities.
This simply means, if it is a want and not necessarily a need, you probably don’t really need it in the first place.
Set up to have a certain amount of money transferred into a savings account every paycheck or on a monthly basis.
Most banks usually offer automatic transfer options. You would just need to choose an amount and how often you would like the funds to be transferred.
Another way to set up automatic transfer is through your job. Just check with your HR department on how to set up automatic deposits from your paycheck into the account or accounts of your choice.
Reduce Monthly Expenses
There are certain utilities that are a necessity such as water, electricity, and gas. However, if you are paying for things like a cable subscription, then now is a good time to cancel.
Over a 12-month span, a monthly cable bill of $100 will cost you $1200 a year.
Actually, much of what is being offered on cable can be found with cheaper options such as internet TV and other TV Apps that are more affordable and at a fraction of the cost.
Also, make sure that you are not paying for extra features on other monthly bills or subscriptions that you simply don’t need. If so, have those bills adjusted as deleted as well.
Cut Back On Travel Expenses
Going on vacation, can blow through a budget, quickly. The reason: cost of travel, food, hotels and fun.
But this is not only applicable to out of town travel.
Save trips to the other side of town, for a specific day. For example, if your dry cleaners and credit union are on the other side of town, then pick one day to make the trip. This will help you save time and money.
The bottom line – avoid traveling on credit cards if it isn’t necessary. Instead, save trips for special occasions and put a savings plan in place for those expenses so that you don’t have to pay for them later.
Don’t Eat Out
Research has found that people who purchase groceries and prepare their own meals can save hundreds per year on food expenses.
Pack a lunch daily for work instead of eating out every day. Having your meals prepared is essential when it comes to saving money.
Make eating out a special treat by doing it only on occasion or by picking a special day out of the month.
Stop Using Credit Cards
If it is necessary to use a credit card, then do so and then pay it in full each month.
Don’t fall into a cycle of making minimum payments as it will just keep you in debt to the credit card company with interest.
To avoid this cycle, pay for things in cash or from your debit card when possible.
Get A Side Hustle
Getting a side hustle is a great way to build funds without sacrificing your normal paycheck. Money strategists suggest working a side job to boost your savings goals in a timely manner.
This plan of action can be used for many of your savings goals; however, it is often implemented for big goals such as paying off student loans, depleting credit card debt, or home improvement projects.