When it comes to managing your finances, it’s hard to know where to start but financial intelligence is a key ingredient to building your personal wealth. And fortunately, there are plenty of accessible money-saving tips you can use to help you save up, reduce your spending, and manage your budget more effectively.
Read on to learn our top tips for growing your savings.
1. Make a budget
As painful as it may sound to many, one of the best ways to save money is to create a budget for yourself..and then stick to it. A budget will help you to stay on top of your expenses and identify areas where you can cut back and save more money. It’s important to plan ahead and look for ways to reduce expenses.
2. Reduce waste
One of the biggest money-saving tips is to reduce your waste. This means taking stock of what you are buying and only buying what you need – or are using. If you have a tendency to fill the fridge but let 50% of your purchases go to waste, you’re effectively throwing money out with the expired milk you need to toss.
When grocery shopping, be sure to write down what you plan to buy and stick to your list. This helps to reduce impulse purchases and prevents you from buying items that you don’t actually need.
3. Move to a cheaper house or apartment
Housing consumes a large chunk of our income, making it one of the most impactful areas for creating savings. In fact, one bit of financial wisdom many people haven’t learned is the 30% rule. This rule says you should spend no more than 30% of your gross monthly income (which is your total income before taxes or deductions are taken out) on housing. For renters, utility costs like heat, water, and electricity also need to be factored into that 30%.
Consider downsizing your living space to reduce your expenses. Moving to a cheaper house or apartment can save you a lot of money in rent and utilities. Housing alternatives like PadSplit that offer affordable rooms with utilities and wifi included are an effective way to minimize your monthly housing costs. You can see how much you could save in a PadSplit using this rent savings calculator.
4. Become an informed consumer
It pays to be in the know. Take the time to research products and services before you buy them. Look for deals and read reviews to make sure that you’re getting the best deal for your money so you don’t have to replace your purchase down the road if you later discover it wasn’t the right fit for your needs.
5. Don’t spend impulsively
One of the biggest ways to save money is hold off on impulse buys. Don’t buy things just because they’re on sale or because you think they’re a good deal. Instead, take the time to think about what you’re buying and make sure that it adds value to your life. And ignore the checkout aisle’s selection of last minute items for purchase – the stores are betting on you to snag a few impulse buys while you wait.
6. Look for free resources
There are plenty of free resources available online and in your local community. Take advantage of these resources to save money on things like entertainment, education, and even physical goods. Facebook often has neighborhood pages specifically created for giving away free items and Craigslist casts a wider city-based net to find free goods. You can watch movies at no cost through your local library using apps like Hoopla or Kanopy (read more here), and some cities have free advanced screenings, making for a fun and low cost night out on the town.
Give yourself a goal, implement these six tips, and then find a way to celebrate your achievement when you hit your monthly goal – just make sure it’s nothing too expensive!
