Do you wish you could save more money? Does it feel like your expenses are getting out of hand? You’re certainly not in the minority, as thousands of people feel like this every day. Managing money is not something that comes naturally to many people, and unfortunately, they don’t teach it in school. Which means you have to try and figure out how to do it all by yourself. Don’t panic, because there are many things you can do to change your spending habits and save more money. Most of which are not all that challenging. Here is a guide that will help you develop good spending and saving habits.
Make a Record of What You’re Spending
This is probably the hardest step of all, but once you’ve made it, you’ll have a better idea of where you can make some cuts. It is also vital before you make any changes to your life. You may be surprised where your money is going. Every penny you spend, for a couple of weeks, should be noted down. Every coffee you buy, every newspaper and every snack. Once you’ve got a list, you’ll be able to split them into categories. You can use your credit and debit card statements to help, as well as your bank statements.
The next step, after you’ve recorded all your expenses, is to make a monthly budget. When you’ve made it, don’t leave it to sit and gather dust. Make good use of it and refer to it regularly for guiding your spending decisions. As you pay bills and other expenses keep it updated. At any point in the month, you should be able to look at it and know how much money you have to spend and what expenses there are left to pay.
Pay Off Loans and Credit Cards
Make it a goal to pay off your loans and credit card bills as quickly as possible, especially those with the highest rate of interest. These tend to be credit cards and store cards. If possible, negotiate a personal loan from your bank to consolidate your borrowing, as a bank loan will charge a lower rate of interest. If you don’t want to borrow any more money, prioritize your debts efficiently.
Plan to Make Regular Savings
Aim to save 10-15 percent of your income every month. This might not be possible to start with, as your expenses will be too high. The aim will be to cut your expenses in time so that you can start saving. Your budget will help you identify non-essential expenses, such as dining out and entertainment. You might also decide you need to cut back or save more money on your clothing purchases. In which case, Stylinity is a great website to visit.
A good thing to do if you want to save more money is to think about what you want to save for. You might want to treat yourself to a vacation or put a down payment down on an apartment.
3 Golden Rules for a Better Financial Life
Looking at where you spend your money, creating a budget and trying to save are important steps to take when you want to manage your money better. However, having the right mindset is just as important as doing the math. There are three rules you should always aim to follow if you want to better control your finances.
• Spend less than you earn – this really should go without saying, but it’s all too easy to get carried away with the spending. If you regularly spend more than you earn your finances are going to spiral out of control, and you’ll be facing debts you can never repay. Spend everything that you earn, and you still won’t be in the best position. What happens when you have an emergency or a major life change? Without any savings to fall back on you’re going to be in trouble.
• Plan for the future always – this doesn’t just mean your retirement, which may be decades away. It means planning and saving for unexpected expenses such as a car repair or medical bill. A retirement plan is advisable because you’ll want to be comfortable when you can’t work anymore. Planning for the future means you need to look a little further ahead than just the next month.
• Make your money work for you – the rich keep getting richer because they know how to make their money work for them. Even while they’re sleeping their money will be growing. You do have to save, in order to make any investment, but the idea is not to just leave your savings in a low-interest account. Invest in something that will earn you more money. That doesn’t necessarily mean the stock market or buying gold. Starting your own business or getting more qualifications so you can get a better job are also sound investments.
Quick and Easy Ways to Make Spending Cuts
• Don’t overspend on gifts
• Always shop around for better deals
• Don’t buy on impulse
• Pay your bills on time
• Keep the cash in your wallet to a minimum
• Plan your weekly meals
• Always shop with a list
• Follow your budget religiously
• Take advantage of coupons and promotional codes
• Don’t waste money on the lottery
• Compare insurance prices
• Negotiate with service providers
How you manage, spend, save and invest your money will have a profound impact on your life. Once you’ve got a budget in place, you’ll find it easier to make cuts. Most of these won’t be big ones, but when you add them all up, they will make a significant difference to your bank balance. It’s a pity they don’t provide lessons in school for managing your money. If they did, there might be fewer people with debt problems around the world. Don’t leave it until your finances are in real trouble before making changes. Being in debt can be a very stressful situation to find yourself in and one that can be avoided with a little bit of thought and careful planning.