When it comes to saving money, there are several best practices. Though it is not always an easy thing to do, there is no doubt that it can be done. The tips discussed below will show you how to save money without breaking too much of a sweat.
Why Save Money?
Before getting around to how to save money, it is necessary to first touch on why to save money in the first place.
Saving money has many different benefits. The first, and most obvious one, is that savings will provide you with a cushion in the case of an emergency. If an emergency comes up, you can use the money that you have been saving to take care of it in an adequate and effective manner.
It is also important to save money because it can help you build strong financial habits. Saving a little money each and every month, while tricky and difficult at first, will quickly become the norm. Having habits like this set in stone makes nearly everything to do with money management a heck of a lot easier.
Finally, it is always better to save up for a big purchase and pay for it in cash. This is always a smarter and safer way to go about things than taking out a loan or signing up for a repayment plan from a retailer. Falling into debt is all too easy and having money saved up is one way to ensure that you don’t.
The single most effective way that you can save money is by being frugal. Even saving a single penny every day will have an impact down the road. Even better is saving a quarter per day and even better than that is a dollar. No matter how much you are able to save, it will make a difference. Keep that in mind during the saving process to keep you continuously motivated.
While being frugal is very important, it is nearly as important to treat yourself on an occasional basis. A life without the occasional small purchase or night out (or some other form of entertainment) is barely a life at all.
Furthermore, many people that restrict themselves from ever spending money on themselves end up reaching a breaking point. After months of absolutely no unnecessary spending, they blow through a whole wad of cash (or maybe even their entire savings). Counter this by buying yourself a few nice things, or treats, per month. It will keep you happy and it won’t break the bank either.
Be Safe When Shopping
Many people make big, unnecessary purchases when they are in an emotional state of mind. For this reason, you should never go shopping if you have had a bad day. Shopping while stressed, depressed, or unhappy can cloud your judgment. You might just end up buying something only to make yourself feel good in that moment.
On this same note, it can be absolutely effective to make a shopping list before hitting the stores. A shopping list will help you keep on track. Seeing the stuff that you need written down will remind you why you are at the store: to buy that stuff and not anything else.
Use Your Credit Card Wisely
There is little doubt that a credit card is a handy tool. But there is also little doubt that a credit card can quickly become your worst enemy.
Simply put, credit cards make overspending all too easy.
If you have had credit card overspending problems in the past, and even if you haven’t, it is wise to only have one credit card at a time. For starters, this makes any payments that you do need to make much easier to keep track of. A single credit card is great for organization’s sake.
Having a single credit card will also limit the amount of purchases that you make with it. This is especially true if you think of it as an emergencies only card. Only use it when you really need to and use cash in all other circumstances.
Watch Out for Discounts
If you’re anything like me, then discounts and coupons can easily tempt you into making unnecessary purchases. If I am at the store and I see something marked down for far below its normal price, I am very tempted to buy it. Even if I don’t need it. Sometimes even if I don’t particularly like it.
Buying something that is on sale just feels like a deal. But it is still spending money. When you are serious about saving money, you need to keep your eyes shut to deals, sales, and coupons. Only use them if you were planning on buying that item or a similar one to start with.
Cut Down Unnecessary Expenses
People today are plagued with tons of unnecessary monthly expenses. Getting rid of these is one of the best ways to save money.
One expense that most people can get rid of is their landline. Chances are that you have a cellphone, so why would you still need a landline anyways? One phone is good enough for most people.
Another common expense that can be cut off is television. Cable and satellite television is so expensive in this day and age. Plus, nearly every new television show is available online, often the day after a new episode has premiered. Check out services like Netflix and Hulu for affordable online entertainment.
Try Out a Debit Card
An excellent alternative to a credit card is a debit card. It is different than carrying cash in your pocket but it is also different from carrying a credit card. Unlike using cash or a credit card, most people find that using a debit card makes them think purchases through a little more closely.
A debit card can be acquired through your bank. It draws money for any purchases made on it directly from your checking account. This way you never overspend. This way you never fall into debt. This is the way to save money.
The tips above and a firm mind are all that there really is to save money. Check out our post on little known budgeting tips to save money as well!