Saving money requires planning and consideration of your income and living expenses. In the 21st century, the cost of living can quickly add up. Living expenses such as rent, mortgage and groceries, for example, as well as utility bills and spending money can eat up the vast majority of your monthly salary. However, with some dedication, you can save big money by living on a budget and gradually building up your savings.
Below are 5 small ways to save big money.
Make a budget
Those who neglect to keep track of expenses and payments each month often wonder why they have difficulty saving. Allocating income to various monthly expenses will help you to save big, and ensure you get the most out of each paycheck. Create a budget that you stick to and watch your savings grow.
Cut down on spending
While building up your savings, it’s important to seek out sales and opportunities to cut down on costs and expenses. As well, cut out unnecessary expenditures for the time being. This includes any excessive spending outside of those outlined in your budget or even finding ways to reduce your budgeted spending.
Make yourself (and your future) a priority
This simply means that any time you receive money, whether it’s from work, the government, or anywhere else, save a specific amount for your future before you spend it on anything else (if you can afford it in your budget). This way, you always make sure that your financial well-being is taken care of before you spend anything on frivolous extras. However, it is also important to remember that getting yourself in debt in order to maintain a savings can be counterproductive. Often the interest on the debt is higher than the interest you earning with your savings.
Be ruthless about debt
This means making sure that anytime you owe money, you are working towards paying it down and paying it off. Servicing your line of credit or student loan, for example, as well as any other debts, is important in helping you regain financial independence. Don’t look at servicing debt as spending money, think of it as saving yourself unnecessary interest costs.
Track your spending
There are myriad of free apps on the market that can be downloaded to most modern telephones that are linked directly to your chequing account and which provide you with a daily, weekly and monthly breakdown of every single transaction you make with your debit card, big or small. Knowing how and why you are spending your money is the first step to curbing counterintuitive spending habits.
If you are interested in making a little money go a long way towards getting yourself out of unmanageable debt, keep the above tips in mind and speak with a Licensed Insolvency Trustee to learn more about how you can get on the right track toward financial independence.