Making more money does not translate into financial stability. It is the money you saved that counts at the end of the day. While you might be earning seven figures as salary now, it is possible that you are still insecure financially if saving is not your strength. Stashing some amount away for future use is not restricted to the rich alone, people who are not so well off financially can also save money. The trick is knowing how and where to cut your expenses.
Making investment through your savings today will go a long way in ensuring a financially secured future. And you can only invest when you have money left behind after you have paid all the bills. Thus, it is important to master the art of spending wisely.
Do you want to know the drill? It’s simple! The basic trick behind saving is cutting unnecessary expenses. Therefore, this article will focus on the little things you are overlooking, but could help you save a lot of money. Now let’s ride on and fill the bank.
Set a budget
You cannot save if you do not have a budget your finance is tied to. By setting a budget, you will be able to review your earnings and your spending. Moreover, checking your spending habit with a budget would leave you some extra cash you do not have plans for yet, thus, eligible to be saved. Oftentimes, budgets give you an overview of your current financial status, thereby keeping one off from over-spending. You should try budgeting your expenses today and see how it will help improve your savings.
Cut your cost
Ever bothered to check the price of goods you can’t do without from other stores? Oftentimes, people spend more when they stick to one store for their grocery needs over a long period of time. You must be careful not to spend more for an item that you can get for less somewhere else. the long-term effect of the little amount you can save by shopping at a reduced price goes a long way. It is the little amounts that would sum up substantially.
Benjamin Franklin, a past vice president of the
Beware of little expenses. A small leak will sink a great ship”.
This quote is an all-round truth and works well when it comes to how you handle your income. If you were the type that doesn’t see anything bad in having every want that comes to mind. even when you can do without such things, the chance is high that you will barely be able to save. Human wants are insatiable, you can never satisfy all your needs. Therefore, you need to learn how to let go of the things you do not really need at the moment and save up the money for the future.
Will Rogers, an American motion actor brought the reality of how people spend money for no reasonable cause when he said
Too many people spend money they earned…to buy things they do not want. To Impress people they don’t like”.
Have you ever asked yourself why you always end up having no money left for savings after paying for your needs? It is probably because you have spent money on what you do not need to impress as Will Rogers as pointed out.
- Wisdom is exercising constraints in spending. Here is a
practicable method to cut your cost. - When next you are ready to go shopping for the house, take a notepad and pen.
- Write down all your shopping needs according to their priority
- Cross out the last ones on the list
- Out of the most prioritized items, select the ones you cannot do without for that month
- Cross out the rest.
What do you have on your shopping list afterwards? You will realize that you have been able to save yourself a lot of money by doing that.
Wealth consists not in having great possessions, but in having few wants”. -Epicectus
Manage your social life.
The social aspect of our lives is a good point to consider when it comes to saving money. According to box office online chart, the average of $11,548,985,362 was spent at the cinema. This is a huge amount that could have add meaningful improvement to the financial lives of the individual if they had saved the money and settled for home-watched movies. The $10 -$15 spent for ticket at the cinema is grossly unnecessary. Not to talk of the drinks and popcorn you will have to buy if you want to enjoy the movie to the fullest.
Again, it is not only at the movies we spend unnecessarily. Couples who prefer eating outside too would find it very hard to save. Eating at expensive restaurants eats up the earnings of the family. According to the Food Institute’s analysis of the United States, people who eat outside/in restaurants spends 44% of their income annually on food. This figure should tell you the effect that eating at home can have on your money saving habit. If you are the party/ cinema goer or you prefer eating out, you need to stop the habit for your savings to grow.
Beware of the trend
So many a time, our income goes into the drain just because we want to acquire the new smartphone on the market. Because we want to be relevant in the fashion world, we spend huge amount of money to acquire the new design. This is an anti-saving habit that often leads to debt. Not only will you not be able to save, you might also find yourself neck-deep in debt.
Fact is, all the latest trend would become old. So what happens then? You still flow with the trend and when the future comes, you will be in a situation where you are financially insecure. The only way out is to be contented with what you have and be focus more on saving money for a better tomorrow than spending on things that will eventually go out of trend.
The money saving magic
You have to come home to the fact that the money saved is the money earned. The one you have spent is no longer yours. Once you realize that, then the next step is to look into all aspects of your financial life. Ask yourself these questions
- What do I buy that does not worth it?
- How conscious am I at spending?
- How much have I had saved up in case the economy crumble today?
Then, these questions should send you on the path of creating a saving habit. Remember all you have read about in this article, the trick behind saving money is spending less. You are now left to make a deliberate decision on crossing out unnecessary items from your shopping list.
Do not be discouraged from saving if you are the type that live low income, insead, always try to set little amounts aside for savings. Remember, little drops make an ocean. And If you were in the class of high-income earners, do not be fooled by your current financial stand. Learn not to spend with your heart but your head. Saving money is the only way towards achieving financial stability in the future. Because it is the money you save you are going to invest. It is easy to save money, but
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