Living an ordinary life can make adding to your savings a difficult task. Whether it’s energy bills, rent, a mortgage, car insurance, food, clothes, or a range of desired luxuries you are spending your money on, learning to cut corners positively and put money in your bank account for emergencies can be trying at the best of times. Thankfully, all that is required is to follow a structured savings plan. With this in mind, here are 6 tips to get you started:
- Pay Yourself First: Designate a certain amount of your salary as “your pay”. This is money that you give to yourself after your bills or debts have been covered. Ring-fence a workable amount which goes into your savings each month, with the rest being spent on a personal reward for meeting your financial commitments while saving money.
- Keep a Budget: The key to efficient saving is to define your budget and keep track of your spending. Budgeting your income immediately after receiving your salary will help you to keep track of your finances. You can allocate a portion of your wages for critical expenses, to prevent your money being frittered away. You will have to check your finances regularly to keep track of your spending, while sticking to your budget strictly.
- Eliminate Luxuries From Your Spending: This is an essential step if you are on a tight budget. If you want to free up some of your cash, then you have to give up on non-essential, luxury items, completely. It might be difficult for you to live without them initially, but once you adjust, you will be surprised to see how easy life can be without them, not to mention how much money you will save.
- Eat for Cheap: If you love eating out with friends and family but end up spending too much money, then there are a number of savings approaches you can take towards food. Try to buy food in bulk, as it is much cheaper than making single purchases. Making your meals from scratch can also be less expensive than buying processed food, not to mention healthier. Only buy discounted foods from supermarkets, most big food suppliers offer great budget deals for savvy shoppers.
- Avoid Expensive addictions: Bad habits can also drain your budget quickly. They not only affect your ability to save effectively, but have a number of negative health effects which are well documented. Cigarettes are very expensive, and with governments increasing taxation on tobacco companies, these costs are set to rise again. While alcohol can be bought relatively cheaply, the costs can quickly mount up as well.
- Limit Your Access: If you find that the temptation to dip into your savings for a luxury item is too great, consider signing up for a bank account where you need either a cosignatory, or has a minimum notice period for withdrawals attached to it. This means that you will not be able to gain instant access to your savings on a whim.
Saving and investing is an important part of planning your future, and should be done with a strict plan in place. Hopefully the above six points will help you on your way to developing a sustainable budget to meet your financial goals.