What are the ways to save money? Everyone would want to know the answer for the same. Saving money might seem like an arduous task when you’re already tight on your budget. However, one thing that is more difficult than saving money is getting started with it. Sometimes, it becomes the most challenging hunt to discover simple ways to save money and how to utilize your savings towards reaching your financial goals.
So, the next thing to do is develop a realistic savings plan to work on your financial goals. We share with you 7 simple yet effective ways to save money and develop your realistic savings plan.
Let us understand how these 7 ways will help you to get started with saving money and have a financially secured future.
7 Simple ways to save money:
#1. Track down your expenses along with your income
The first and foremost step to take towards saving money is to know where your hard-earned money goes every month. Record every expense you make without neglecting even your coffee bills, newspaper cost etc. Every small cost adds up to a big amount and hence you need to account for every penny you spend. Once you’ve recorded your expenses, it’s time to organize it. Categorize it such as groceries, gas, rent etc. and total each amount to know how much you spend on each category. You can even use your credit or debit card statements to get the details.
#2. Create a budget plan and follow it
The next step which is an important step in the savings process is to create a monthly budget. By creating a budget, you will know where to spend and where to be wise. By identifying areas where you can minimize your expenses, you can maximize your savings. Always it is important to implement what you plan and sustain it throughout. Discipline is very important when you are making savings. There will always be a temptation to spend more when you are stressed or happy, it is always better to control your urge to spend more.
#3. List down your financial goals with a timeline to reach them
Once you know to minimize your expenses, it is time to plan your savings. The goals can be a short or a long one. Based on your need and desire you can set the financial goals. Short term goals may include buying your home, car etc., long terms goals include retirement savings, kid’s education etc.
When you plan your retirement savings consider IRA accounts and other options.
#4. Set priorities for your financial goals accordingly
The whole financial planning or ways to save money is not about setting financial goals but prioritizing them as per the need of the hour. Priorities change with time, so prioritize and sustain your long-term goals. If you want your kid to study at Harvard, it is important that you save the money needed for his education. Prioritizing the goals can be very useful to plan your savings plan.
#5. Plan on saving money based on your priorities
A study says at least 10-15 percent of the monthly expenditure should be towards savings. If your needs and aspiration are high that saving this amount is impossible, it is always important to identify the pain areas and start implementing strategies to curb those expenses.
#6. Look for options to save money
For short-term goals, you can look for the following options:
1. Fixed deposits
2. Savings Accounts
3. Short-term investment options.
Long-term goals, you can choose the following options:
2. Invest and resale of properties
It is always important to choose the right tool which can help you both in saving money as well as help in maximizing your profits. When your goals are reached, save the additional interest amount which you have got for your investment in another plan so that the habit of savings continues.
#7. Opt for automatic saving option and watch your savings grow
Every bank around the world has many options to save your money. You can directly transfer the money into deposits with the click of a button. It is always important to choose your options wisely and watch your savings grow. The pleasure you get when your savings grow is priceless.
Saving money will take both time and efforts. It depends on how focused you’re towards making it work for you. The first thing you need to do is to get started with saving money by following the 7 ways. Initially, you might not see a huge difference in your savings. So, don’t get disappointed. Instead, notice the change you made from being a ‘person with no savings’ to the ‘one with some money as savings.’