Are you able to save? Is this disheartening for you to even think about it?
If yes, then you have landed on the right page.
At the beginning of every month, if you have a huge to-do list and have spent most of your money, then you need to separate your desires from your necessities.
Do you want to buy your first car, build your dream house, travel overseas, and live a good life? Following smart money making strategies will help you achieve them and also secure your financial future.
Now it’s time to grab a sheet of paper or use your smartphone to jot down how to adopt better money habits.
Here are a few tips to change your current habits and live a happy life by increasing your savings.
Be honest and eliminate bad habits
Facing the reality of what you are doing with your life is the most important habit you should have learned.
So, admit you’ve been lying to yourself and accept the fact first. Be proud of yourself for being honest and show self-compassion. Now, it’s time to make the required changes in your financial habits.
Let yourself aware of where your money is going
Expense tracking is the most challenging task for anyone. You have to be 100% honest with yourself every day about where your money is going. Keep a record of your per-day expenses. Make a short note saying why you purchase it.
This should be done regularly because it is easy to forget small purchases. The written document helps you in analyzing and making improvements in your spendings.
Regularly scrutinize your finances
Whenever it comes to saving more, what comes first in your mind?
To become a better money manager, you must first control your money, the most effective way of which is to review your financial situation every day.
Many tools can help you in managing money, such as Mint or Personal Capital that gives you a complete financial picture. Provide every single detail regarding your bank accounts, your credit cards, your checking account, all of your investments, and your assets.
Log into your account daily to look over your finances. This can help you in tracking every recorded purchase and to be sure you are not being overcharged for something that you did not buy.
It also allows you to look into your spending habits, thereby reducing your overspending or even eliminating it completely. It can help you create your emergency fund.
Differentiate your Needs from Wants
It’s human nature to get attracted to expensive brands. Peer pressure can force you to buy everything which is beyond your limit. As Paula Pant states “you can afford anything but not everything.” This is why you need to define what your needs and wants are.
Daily necessities like food and house expenses are the needs. And wants includes items such as high-end shoes, the latest smartphone, etc.
You shouldn’t buy everything from your wants list immediately. Instead, pick one and create a budget for it. Save money first and reward yourself with an item from your “wants” list once you’ve reached a savings goal.
Avoid Emotional Spending
Emotional spending is also the result of sales pitches and often a big addition to final costs. Let’s look at the iPhone for example. Most tech-savvy people will tell you that although the iPhone is decent, there are almost always better options tech-wise that also cost less than the current model of iPhone.
But all the promotions and your pals buying the iPhone may convince you that getting one is the best option. But if you had taken the time to think logically, then you may decide you don’t need a new mobile device at all or at least spend less for a brand that does just as much.
Set Smart & Realistic Goals
Targeting for something makes you focus to achieve the target. Likewise, saving without intention doesn’t work.
The purpose of creating smart goals is to be able to track your progress. Sometimes what we would like to save and set aside has to make sense. Stop over-budgeting your savings because you will just end up being upset for the fact that you are unable to save the amount you wanted. So, in short, make a realistic budget and set achievable goals for your savings.
Become an Expert in Negotiating your Bills
By going through your bills regularly, you will likely be able to find opportunities to reduce your bill by eliminating some of these charges.
For example, if you pay for the sports package, make sure you are actually using everything that you are being charged to use.
Go through and highlight any charges on your bills that you cannot clearly determine. If you find that you are paying a few extra dollars every month for an item that does not make sense, call the company and try to dispute the charge.
If you take out time and energy to be aggressive enough to call each of your accounts and ask for their best deal (or even for a price reduction), you may be able to save some money on your bills every month.
Avoid using Credit Cards
The foremost reason for getting into debt is we can’t save.
Debt is not always a bad thing. Debt allows us to purchase and enjoy what we can’t afford at this moment. However, forget about earning points. Leave your credit card out of the sight.
Surveys show that 38.1% of our households are in credit card debt. So, the best way to avoid credit card debt is to stop using it altogether.
Finally, if you already have a high balance on your credit card(s), then you can take help from a debt consolidation company. You can consolidate all your bills into one single monthly payment and pay off your debts. Thus you get relief from debt collectors.
Use Discount Vouchers Shamelessly
Get into the habit of collecting and using coupons. Review the coupons before going to a shop.
Search for the coupons in daily newspapers or visit some online couponing websites which give good deals. The more time and effort you put into couponing, the more money you will be able to save.
Apply the 30-day rule in your Habits
Have you ever purchased anything which you regret a few days later?
If so, the 30-day rule is for you. Whenever desires arise in your mind, please limit them to just for 30 days. If after that period, you still want to buy the item, go ahead and purchase if you can afford it. This won’t stop all bad purchases but it will cut the most irrational ones. Through this method, you will control your impulse spending, too.
Invest in Yourself
You have some money to spare, now what do you do with it?
Investing is the better idea you can do for your money. Instead of keeping your cash in the bank, put your money in investment accounts. While it is not without risks, making early and smart investments can yield more profitable returns.
Increasing your income always helps when you want to save money. Therefore, you can start a side hustle or change your job to earn extra money. You can also choose to start a business in an industry you’re familiar with.
Will it be easy? No, but worth the effort. If you’re still clueless about where to start, here are some business ideas.
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