If you want to ensure that you have enough money to go on holidays, send the kids to college, and retire later on, it’s important that you start thinking about your spending now and aim to save some money.
Saving money doesn’t have to mean going without, it just means choosing more carefully where you decide to spend your money so that you can have everything you need and save a little, too.
Track your expenses
Tracking your expenses is the first and most important step when you’re trying to save money. Most of us think that we’re pretty frugal, and then find that we’re actually spending more than we need to be when we really look at it.
The simplest way to track your spending is by downloading a spending tracker app that will allow you to record what you’re spending as you go. Even better, see if your bank has an offering as they will already have a record of your spending, so it makes sense to use it.
Make a budget
Once you have a good idea of what you’re spending each month, you can make a budget. Your budget should include all of the expenses you have to spend money on each month (including your rent and utilities), and also those that you don’t necessarily spend on every month but that you need to bear in mind; for example, car repairs or shopping for clothes.
Your budget will give you a realistic idea of how much you are spending and how much you are earning, so you can ensure you don’t spend more than you have coming in.
Within your budget, you should then allocate a certain amount of money to save each month, and stick to it! That way you always know that you are saving for the future.
Find ways to cut your spending
Once you have your budget, you can start having a look at ways to cut down on your spending and increase your savings. This is where your expenses tracker really comes in handy. For example, if you notice that you are buying takeaway coffee five times a week, you could save some money by scaling it back to a once-a-week treat and making coffee at home on the other days.
You can also cut your spending in some other ways:
- Make use of the coupons that come through the mail! Coupons frequently offer discounts on local goods and services, and some even offer the chance to win real money.
- Switch from named-brand groceries to generic alternatives. The quality is usually comparable, and it will be much cheaper.
- Speaking of grocery shopping, when you go to the store be sure that you have planned your meals for the week, and that you have a list of what you need. You can save a lot of money this way because you won’t be tempted by impulse purchases.
- Go through your subscriptions; for example, Amazon Prime, Netflix, and so on, and cancel the ones that you aren’t using.
Set realistic saving goals
If you’re saving money it can be helpful to have a goal in mind so that you aren’t tempted to give up.
Be sure to set goals for both long-term savings such as your retirement, and for shorter-term events such as holidays.