Figuring out the best ways to save money can be difficult in today’s economic situation. However, there are some methods that you can try to cut down your expenses.
Pay off Your Debts
Put off buying any unnecessary items until your debts are paid. It’s going to be very hard to manage your finances if you owe money. List down your debts and set aside as much as you can from your salary to pay it off. Simply put, being debt free will give you more options on how to save.
Keep an Expenses Record
This isn’t as difficult as it seems. Use a notebook and jot down your expenses. One of the quick ways to save money is to cut down on all those unnecessary expenditures. Write everything down, including the small purchases. Often, it’s these small items you
buy that drive up your monthly expenses.
By writing everything down, you’d realize just how those cigarettes, beer, ice cream etc. are costing you. Don’t throw away those receipts. They’ll help you keep tabs on where the money is going.
Cutting Down on Large Expenses
The biggest costs will come from the mortgage payment, insurance and car. Is it possible for you to refinance your mortgage? Look at the various insurance companies; there might be a better deal out there.
There are several easy ways to save money on cars. If your family has two cars, you can just sell the other one and earn some money to boot. You can save on gas by taking public transportation. If you can walk to school or work, then don’t take the car.
Learn to Budget
Write your salary on a piece of paper. Subtract from it the essential bills (house payments, electricity, water etc). Create headers like “entertainment”, “restaurant expenses” etc. This will let you see clearly just what portion of your expenses is eating up your budget.
Now think of how much you want to save per month. One of the best
ways to save money is by setting limits on eating out and going to the movies on weekends. You don’t have to totally eliminate it; just impose a limit on the expenses.
As stated, one way to do this is by establishing a monthly savings goal. However, this amount needs to be realistic. Again, you can save a significant amount if you stop / reduce buying non essential items.
Use Cash, Not Credit
Whenever possible, pay with cash. Before you go shopping, get an idea of how much these items are gong to cost. Then you should bring just the needed amount of cash. When you use credit cards, the temptation to overspend will be great.
If you must use credit cards or checks, take your savings notebook with you. It’ll help remind you of the need to save.
There are other ways to save money. You can deposit a percentage of your salary as soon as you get it. You can also take advantage of the 401k plan, time deposits etc. The bottom line is that you can, and should start saving now.