Saving Money: What’s That?
Many people don’t think about saving money at all, or feel like they don’t make enough to be able to save. The truth is, when it comes to saving money, even a little bit counts. Just like investing, starting early, and doing it regularly can really add up over time and make a big difference in the long run. There are a lot of ways to save a little bit, and if you do so regularly, you could end up with a nice amount in your savings account. The following article discusses how to save money, even if you aren’t making a ton if it.
Trimming the Spending
The first way to save is: don’t spend. When you think of each purchase before you make it, ask yourself if you really need it, or if it will really increase your happiness for more than the short term. Is it a cup of coffee that is way overpriced, and you could make one at home for a fraction? Is it a subscription service you have had for a long time, but rarely use, or could give up without really missing? Do you need all those premium channels, or would a smaller subscription to Hulu or Netflix work just fine for your TV fix?
Try not to give in to fads. Just because the newest iPhone has come out doesn’t mean you have to have it. Is your phone working just fine? How about your watch? If so, reconsider upgrading or buying an Apple Watch or other such items that cost a lot of money. Most cell phones are smart phones these days, and the high price tag on some brands just doesn’t seem justifiable in most cases.
Have you shopped around and found the best price? Many times, you can save a lot of money on necessary purchases by checking out more than one vendor. Take car insurance-they say that you should be shopping around for car insurance every 6 months to make sure you are getting the best deal. Doing so could potentially save you hundreds of dollars. There are even services out there to do it for you. Buying brand names rarely pays for itself these days, as most things are made with the same cheap parts, so look for the generic version first. If you try it and do not like it, or find it is actually not as well made, then buy brand name the next time (if there is one). Most of the time you will find the generic to be just fine, at least for small ticket items. If you are buying larger items, do your research to find out which brand is best and buy that one, in hopes that it will be a one time purchase.
Saving a Little Each Time Means Saving a Lot Over Time
Regularly putting aside a small part of your income, before you spend anything, can add up to a lot of money over time. If you do it consistently, and always before you see the rest of your paycheck, you will never really miss it. For retirement, this can be in the way of a workplace 401k or 403b (which you should be participating in if it is offered, at least enough to meet the company match, if there is one), or an IRA if your workplace doesn’t offer it. Set it up so there is an automatic withdrawal each payday. You should also be aiming for an emergency fund that covers at least 3-6 months of expenses, ideally. Putting this money into a Money Market or High Yield savings account where it can be accessed if needed, but earns a little more interest than your regular savings account is a good idea. You don’t have to put in a lot from each paycheck, but a little each time will add up, and you will be grateful for it if and when you need it.
Try not to eat out very often. Restaurants are expensive. They have to cover a lot of overhead to serve you the same food you could make at home for a fraction of the price, and have leftovers. Try setting a goal to eat out rarely, be it once a month, or whatever is realistic for you. Then, make your own meals at home, and resolve to eat your leftovers. Wasting food is dumping money in the trash. Watch how fast your savings will grow if you put the money you would have spent in restaurants straight into your savings account. You will be amazed! The same goes for planning your meals ahead of time, and then going into the grocery store with a list and a plan. You will save money by not buying extra items each time you go in, and perhaps being able to use some of the ingredients for multiple meals.
If you haven’t set up a budget so you can see where your money is going, make a goal to do so as soon as possible. Knowing where your money is going is the first step to saving. Then, pick the category of spending that is the highest, not counting bare necessities like mortgage and regular groceries, utliites, etc. See if there is any way to trim from that category, like the restaurants example above. For us, the money pits are almost always eating out or shopping at Walmart. If we go into WalMart without a list and the willpower to stick with that list, we will always spend way more than we plan. Making a list ahead of time is a tool we use to hold ourselves accountable.
Saving money doesn’t have to be hard. Making thoughtful purchase decisions and committing to setting up automatic savings will both go a long way toward having money when you really need it. Always shop around for the best price, and don’t throw money in the trash by wasting what you have bought, either by buying one time use things you didn’t need, or not eating leftover food you already made.
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