JoshDoes saving money seem overwhelming to you? Welcome to the club! We all want to save some extra cash but fail to do so. We often wonder how much we will be able to save in a year if we cut the unnecessary costs and yet we fail to control ourselves from spending unnecessarily. It happens to all of us at some point in our lives. Undoubtedly, it seems fun and exciting to throw a party every month or to go on a vacation every year. But at difficult times when you have nothing left in your account with no one there to support you, nothing would save you except your savings.
Before we get into the details of how to start saving, the first step is to create awareness about your expenses and finances. Understanding the difference between your needs, wants, and desires will help you understand how you can save better. You’ll be surprised to know how much you spend on things that are not your needs and how much can you save if you refrain from spending on your wants and desires.
There are multiple strategies both long term and short term to save money. Here are 10 effective and easy ways to save money.
1.Make your Budget
As stated before, the foremost step you need to take to start saving money is by making your budget. Have a detailed understanding of your inflows and outflows i.e. how much money you earn and how much you spend. For making a budget, the 50/20/30 rule is quite effective. According to this rule, you should reserve 50% of your income for essentials including rent, utilities, food, etc. Put 20% income in savings, and keep the remaining 30% for entertainment or any other personal expense.
2. Automatize your Savings
Transferring money manually is another obstacle on your way to easy saving. When you have to manually transfer money, chances are, you won’t do it. Sometimes you will simply forget to transfer it or you will convince yourself to spend this money for the last time and that you’ll save from “the next month”. Guess what? That “next month” never comes. To break this psychological cycle, you can simply avail of the automatic transfer of a certain chunk of your paycheck directly to your savings account to maintain the flow of savings.
3. Emergency Fund
As the name explains, emergency funds include the money you save for any certain event or crisis in the future. According to some experts, the money you should have in the emergency fund is equivalent to your expenses of at least six months. Emergency find will help you survive unemployment or any other uncertainty without going into debt.
4. Keep Away from Debt
One of the great ways of saving money is to avoid debt as much as possible. Even if the debt is necessary, don’t let that pile-up, pay it off every month. If you spend wisely, you won’t need debt in the first place.
5.The famous ’30 Days Rule’
It is a psychological way of determining how much you need a certain item. Jot down the item’s name and its cost. Instead of buying it right away, wait for 30 days then ask yourself if you really need it. If it’s a yes, go but it. Otherwise, don’t.
6. Prioritize Quality
Whether you are making a small purchase like buying new clothes or taking out a larger chunk of money like renovating your house, quality should always be your priority. If you spend on things that last longer, you don’t have to buy it for long.
7. No Need for a Gym
You know pretty well that you can so most of the workouts at home rather than going to the gym. There are countless tutorials on YouTube that you can learn from. So why waste your money when it can go straight to the piggy bank?
8. Say No to Sales
As tempting as these deal sound t you, you don’t need it. Even if something is on a 50% discount, buy choosing to not buying it, you’ll get 100% off. All your money be safe in your account which can be used in more necessary things. How does that sound?
9. Buy Preloved Items
There is no shame in buying used items. Thrift stores can be really helpful in saving some bucks. You can get good quality items at a relatively lesser price.
10. Invest in Shares
Finally, one way of saving money is to find ways of multiplying it. Buying shares of large organizations will be very helpful as it will most probably increase its worth in the future. You can buy the shares, wait for some time and when their worth increases, you can sell them and earn the profit. You can buy shares in various popular companies like Apple, Ali Baba, etc. For more information, check out how to buy Ali baba stock . A quick guide on how to buy apple stock will help you buy the stocks and multiply your investments in no time!