If you want to become financially successful, you have to start with savings. This article will focus on the 5 easy tips on how to save money from proven ways and approaches.
I have to admit that saving money sounds easy but it is not practically. This is because numerous needs fight for limited resources. Hence, you have to sacrifice meeting some of your needs to grow your savings kitty.
There are numerous benefits that you get through saving such as;
- Setting aside funds for emergencies
- Having money for investment
- Preparing for job loss
Hence, saving acts as financial insurance when things don’t go as per the plan.
Now that you have an idea of some of the savings benefits, let’s look at how to do it.
5 Easy Tips on How to Save Money
The best saving approach is dependent on your financial ability and comfort. Hence, you should at least get one that suits your needs. It is all that you need to get going.
1. Working with a budget
This speaks directly to the element of planning. A budget acts as a guide that determines where to spend your money and when.
It is a financial bible that you must have if you want to succeed in saving. A budget helps minimize overspending making it possible to spare some income for saving.
Normally, a budget is based on your income level. Most financial advisors advocate the use of the 50:30:20 rule that says 50% of your income should go to needs such as rent and food. 30% to wants such as entertainment and 20% to savings.
Try implementing this in your budget and see your savings start to rise.
2. Reduce your debts
Debts take away your wealth in form of interest payments, especially when used for consumption. By this, I mean things such as buying a personal car or going on a holiday.
Using debt for such activities only results in the reduction of your savings ability. Hence, make it your goal to minimize your debts or avoid them completely.
If you are already deep in debt, focus to clear them without adding more. Over time, you will clear them and become debt free. When this happens, put aside the funds used to pay for the debts towards savings instead.
3. Buy in bulk
Buying in bulk helps you to get goods and services at a lower cost. This is because it is easier to negotiate bigger discounts when buying in bulk.
The goal of buying at a lower cost is to have extra money for savings. You should also target to shop during discount holidays when most traders sell lower.
4. Eat at home
Have you ever calculated the amount of money you spend eating out? If not, try doing the math to realize how much you can save if you ate home.
Cooking and eating at home not only helps you cut the food cost but also gets you better quality food. You can eat at half the price that you get at a restaurant.
Put the rest half on your savings. Hence, eating at home is one of the 5 easy ways how to save money.
As I close my list, investing is a great way to grow your income that in return helps you save more. This is because savings come from your income.
Hence, the more you make, the higher your savings. As a beginner, target to invest in ventures that can offer passive income. These are investments such as stocks, real estate, and bonds.
Ultimately, when your savings kitty is large enough, it will give you the confidence to do even larger investments until your income makes you financially successful.
All the best in this journey. It takes time to grow savings but it is worth it in the end.
Below is a recap of the 5 easy tips on how to save money.
- Working with a budget
- Reduce your debts
- Buy in bulk
- Eat at home