We can all benefit from money saving tips. We are already two full months into 2020 and the year is flying by. If you haven’t been paying attention to your finances, chances are your money has been flying by as well. Many people struggle to keep up with their bills while setting aside money towards savings. Saving your money is crucial for your financial future.
If you are not proactive about your finances, you won’t be able to set aside enough money to increase your savings account. Each month there are different savings strategies, credit card promotions and required filings for individuals. Follow these 5 money saving tips and stay motivated in your personal finance journey.
1. Audit Your Spending
It’s like when you squash a spider with a tissue but you don’t want to look at the guts underneath. However, you just have to do it.
Analyzing your spending habits is similar and necessary. You have to diligently review the previous month’s spending so you can categorize where your money is going. Taking a closer look at your outgoing funds can have a dramatic impact on your perspective on things. People often overlook their habitual expenses every month and overspend without realizing it.
Pay Attention to Your Eating Expenses
Make a grocery list before you go food shopping. In doing so, you will save time and money. With a well organized shopping list, you will be able to walk into the grocery store with a set plan of action. Rather than browsing each aisle, you can find exactly what you need quickly. Randomly roaming grocery aisles causes you to waste time searching aimlessly. If you can avoid unnecessary expenses, you will start to notice extra cash leftover in your checking account each month.
Limit eating out to once per week. You might like going out to lunch during your lunch break, but that could be holding your finances back in a major way. Going out to lunch on a daily basis and overpaying for food is an easy way to burn a hole in your pocket. People overlook the cost of dining out on a regular basis.
The hardest part is getting into the habit of preparing your meals for yourself. If you buy lunch every day, chances are you also buy dinner regularly as well. If you are dining out multiple meals per day on a regular basis, you are likely overspending on food. Take a look at your month-long food expenses so you can look at where you can trim costs. If you can make an affordable budget, you can eat well while saving money.
Eliminate Wasted Expenses
Eliminate any wasted expenses that you don’t need. Don’t pay for memberships that you do not use; that is wasted money. Whether it is a gym membership, a magazine subscription or a streaming service, make sure you know what you are subscribed to. Make sure you have not signed up for a free trial and are paying for a service that you do not use.
In addition to reviewing your membership subscriptions, make sure you are not getting charged by your credit card company or your bank. It wouldn’t be the first time a credit card company slips in an unexpected fee on your monthly statement without any forewarning. Be sure to review your monthly statements to be sure you aren’t getting any unwarranted charges.
2. Check Your Bank Accounts
With the economy in a very volatile state, people are increasingly moving their money into cash reserves. The problem is, not all savings accounts are created equal. Some banks give very low interest rates and you are barely able to keep up with inflation. If your bank does not offer you a good interest rate, you are wasting your money’s time.
Compare savings rates of multiple banks so you can evaluate the different benefits of each. Some online banks offer fantastic savings rates while local banks offer better customer service support. Based on your age and lifestyle, your banking needs will vary.
Setup automatic bank transfers between your checking account and your savings account. This will ensure you will make monthly contributions towards your savings account along with prevent spending the money on your debit card. Automatic bank transfers is a hidden secret and a free tool that banks offer that can instantly help you improve your financial situation.
Challenge yourself to save more each month by setting goals and shattering your expectations. That’s right. You will shock yourself with the amount of money you can save if you commit yourself to your new savings plan. Many people underestimate the power of reducing spending and maximizing savings.
3. Get Your Returns and Rewards
This is the time of year to plan your finances and work with your registered CPA accountant to get your taxes in order for the prior year. April 15th is tax season and the government has money that is owed to you.
Make sure you get a head start on your annual finances. Get started on filing your taxes sooner rather than later so you can collect any outstanding balances owed to you by the government.
Filing your taxes ahead of time will help prevent any unwanted fees from the IRS and you will also get any tax returns sent back sooner. If you can do this accurately, you should pay your taxes as soon as you close out your previous year’s finances. This way you are prepared for Uncle Sam’s take.
Make sure you account for everything from living expenses to your health costs. There are so many different types of tax benefits you can qualify for depending on your lifestyle. Home owners get certain benefits while married couples with children have other tax benefits. You need to do your research with a registered Certified Public Accountant to find right tax breaks for you.
Once you have wrapped up the previous year’s taxes, you will have a helicopter view of your finances. Evaluate the previous years’ finances and set goals for your year ahead. This will help you understand how far you’ve come, how much progress you have made and how much further you can progress.
4. Start a Savings Plan
While we have mentioned analyzing your expenses to help you save more money, starting a fresh savings plan is also necessary. After you check in on your checking and savings accounts, you will have a better understanding of your balance sheet. You need to know how much money you have saved and more importantly how much money you owe to lenders or creditors. If you have liabilities in the form of outstanding debt, you need to start paying it off as soon as you can.
If you have a better understanding of your balance sheet, it will help you steer in a better direction moving forward. Make a detailed savings plan to start setting aside money each week/month so you can grow your savings. Be diligent and obsessed about paying your bills on time to knock out your debt as soon as you can. Crushing your debt is a huge accomplishment. Work as hard as you can to get there so you can invest your money for the future.
Money Saving Tips
Be patient with yourself. This stuff takes time. Stay consistent with your monthly payments and don’t overthink the day-to-day process. It gets overwhelming when you think too much about the daily grind. Instead, try to enjoy the ride and be positive during your journey. Positive attitudes can have a huge impact on your health.
If you can manage to stay consistent with your monthly payments and savings plan, you will watch your liabilities plummet while your savings start to sky rocket. The strategy is simple. Spend less money and save the surplus. You will be surprised at how easy it is.
5. Track Your Progress
If you fail to track your progress, you won’t know how much money you have saved by making these small changes. You will impress yourself by paying attention to your month to month and annual progress.
There are many different ways to track your progress of following these money saving tips. You can keep a simple notepad to jot down your expenses and make note of any important shopping items you need to remember. Notepads can help you stay organized on a day-to-day bases beyond just tracking your financial progress. Maintaining a notepad or notebook is a great habit to practice.
If you don’t want to have to carry around a notepad, you can easily track your progress on your mobile device. Open up a note on your phone or download one of the many apps to keep track. Mobile apps like Mint are fantastic and highly recommended if you are trying to track your finances. Mint gives you the ability to link your bank accounts, credit cards and monthly bills so you can track everything accurately. Mint is very easy to use and super helpful on a daily basis. You can setup weekly or monthly reports to automatically be sent to you via phone and email. These reports will help breakdown your expenses and categorize what you are spending money on.
Many people also track their finances with simple spreadsheet documents. You can list out your outgoing expenses and label each cell however you need. Simple spreadsheets are helpful to stay organized and aware of your personal finances.
Ongoing Money Saving Tips
You will constantly need to stay on top of your personal finances. Pay attention to the prices you pay when you are shopping, you don’t want to overpay for basic groceries due to a lack of attention. If you are able to keep notes of your finances and grocery needs, you will start to optimize your weekly performance as an individual. You will begin saving time by always maintaining a details list of your needs. You will be much more aware of your expenses and save more money.
Be proud of yourself for starting your savings plan and don’t look too far ahead until you realize the progress you made thus far. Financial freedom is something everybody strives for. Following these money saving tips will help guide you towards a stronger financial foundation with a brighter future ahead.