How to save money- 7 simple ways to save money
Sometimes the hardest thing about saving money is just getting started. This step guide for how to save money can help you develop a simple realistic strategy, so you can save for all your short-term and long-term saving goals.
- Record your expenses; The first step to start saving money is to figure out how you spend. Keep track of all your expenses that means every coffee, household item or cash tip. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Use all your transactions statements to make sure you are accurate.
- Budget for savings; Once you have an idea of what you spend in a month, you can begin to organize your recorded expenses into a workable budget. Your budget should outline how your expenses measure up to your income, this enables you to plan on your spending and limit overspending. In your budget you should include a saving category, aim to save your income before spending it.
- Figure out how you can limit your spending; If your expenses are so high that you can’t save as much as you want, it might be time to cut back. Identify non-essentials that you can spend less on, such as entertainment and dining out.
- Set saving goals; One of the best ways to save money is to set a goal. Start thinking of what you might want to save for, example for getting married, saving for retirement or for buying a home. Then figure out how much money you’ll need and how long it might take you to save it.
- Decide on your priorities; After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. Be sure to remember long-term goals. It’s important that planning for retirement doesn’t take a back seat to shorter-term needs. Learn how to prioritize your savings goals so that you have a clear idea of where to start saving.
- Make saving automatic; Almost all banks offer automated transfers between your checking and savings accounts. You can choose when, how much and where to transfer money or split your direct deposit so that a portion of every paycheck goes directly into your savings account.
- Watch your savings grow; Review your budget and check your progress every month. Not only will this help you stick to your personal savings plan, but also helps you identify and fix problems easily. Understanding how to save money may even inspire you to find more ways to save and hit your goals faster.