Easy Ways To Save More

It’s a question most of us ask at some point: how can I save more money?

There are plenty of eye-catching distractions and nice things to spend on nowadays, which can be a burden on the wallet if you aren’t careful.

On top of that, letting go of money is easier than ever; credit cards and seamless mobile transactions enable you to complete a transaction pretty much instantly.

You almost don’t even realize that you’re spending anything.

The consumerist age we live in practically encourages spending, since that’s largely what keeps economies growing.

The flip side is that saving takes a backseat.

Many find it hard to even start saving.

According to a 2019 Bankrate.com survey in the Unites States, roughly 21% of earners don’t save any of their annual income.

That’s only one in five people.

Moreover, those that do save aren’t saving much; only 16% of savers set aside more than 15% of their annual income.

For reference, the generally advised amount to put aside is 10-20% of your yearly income.

Elsewhere in the world, the portion of earners that saves differs.

More people save in Europe, on average.

In the Netherlands, for example, only 11% of earners don’t do so.

The good thing is that, at the end of the day, you can control what you spend – and save.

Here are our top 10 tips to get you going.

1. Track your spending

This is arguably the most obvious one, and yet it’s not done adequately by many.

Tracking your spending is an absolute must if you want to keep your personal finances in order.

It’s not that hard either – all you need is a spreadsheet or mobile app.

The truth is that you won’t know how much you can save, if at all, when you lose track of where your income is going in the first place.

2. Control splurging

Building on the above, it can be hard to resist that trendy new shirt or latest pair of cutting-edge headphones.

Although it’s totally natural to want to spoil yourself from time to time, uncontrolled splurging will leave you with nothing to put into a savings account.

One rule of thumb to keep in mind (that works for us): if you spot something that isn’t a necessity but you really want to buy, sleep on it for 24 hours.

Chances are you may not want it so bad after all – if you still do, then it’s your choice to make.

3. Set savings goals

As with many things in life, goal-setting can make or break an ambition.

You can, for instance, come up with short- and long-term goals.

Say you want to treat your partner to an exotic honeymoon in a year.

Decide on the amount you would need to do that and set a deadline.

Then plan when and how much you can put aside to make that dream honeymoon a reality.

For longer-term goals such as retirement, you may also want to consider investment accounts like an IRA.

4. Automate savings

A modern life-hack (or saving-hack) is automating an amount of income that goes into a savings account.

Most banks give you the ability to do that.

If you earn $5k a month and want to consistently save 15% of your income each month, set up your account so that $750 (15% of $5k) is automatically transferred to your savings account without you having to lift a finger.

This way, you won’t even have to think about it.

Nor will you forget to make that payment.

5. Lower your energy bill

If there’s one thing that many of us can cut down on, it’s energy usage.

Leaving AC’s blasting in empty rooms or having the TV on when we’re not even watching is a drain on the wallet.

That money is much better off being wisely saved.

6. Pick the right savings accounts

Saving can even be profitable if you choose the right savings accounts.

You can, for instance, consider putting your money in a certificate of deposit (CD).

Once you deposit into a CD, your money is locked up for a fixed period of time.

In exchange for that, your bank will usually offer you a higher fixed interest rate than a normal savings account – at the end of the fixed term, you receive the deposit plus interest.

Retirement accounts may also be more tax-friendly and save you money down the line.

7. Avoid using credit

Using credit can throw you in a hole of debt if unchecked.

The interest you’re paying on that credit may be better off going towards savings instead.

At the very least, ensure you’re not overspending and maintain timely payments, as failing to do so will also negatively impact your credit score.

8. Skip that daily takeaway coffee

We all know that one person that can’t live without their daily Starbucks cappuccino.

Heck, maybe you’re that person.

If you are, cut down on that expense – the price may seem insignificant, but it adds up.

If you’re spending $5 on a coffee every working day, that adds up to $1,225 a year (assuming you take 3 weeks off).

Read that again!

9. Translate costs into hours worked

When you see something non-essential you’d like to (impulsively) buy, calculate how much time that item is worth instead of just how much money.

If you crunch the numbers and find that you earn $20 an hour, those $200 shoes you want to buy are worth 10 hours of your life.

Seeing it from that perspective might change your mind and keep you from spending for no good reason.

10. Start saving as soon as possible

Last but not least, start saving as soon as possible.

This bit of advice cannot be overstated enough.

The earlier you start, the more you may have in the bank later on in life as compound interest does its magic.

It’s a well-established fact that most earners who start saving earlier in life end up with better returns in the long-run.

Moreover, starting young gets your mindset in the right place and sets a strong foundation for successful personal finance.

Categories: : finance