The new year offers a fresh start to everyone. And what better way to start the year than by saving and taking care of your finances? Everybody dreams of gaining financial freedom, but a lot of people feel at a loss when it comes to saving money. While saving can feel intimidating and impossible at times, it is actually doable and quite easy to manage. Hit your financial goals faster with these 8 money-saving tips.
1. Know what you’re saving for
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Why are you saving? Knowing the answer to this question will help you succeed in your financial goals. Your goal can be anything from getting a pet dog to making a down payment for your dream condo. Figure out how much exactly you need and how long it might take you to save for your goal. For example, if your goal is to rent or buy a DMCI condo, start by referring to a DMCI homes price list. It’s important that you begin and end with a clear goal in mind. Without a goal, you risk making poor financial decisions and losing track of your purpose.
2. Make your budget plan realistic
A realistic budget plan starts with your fixed expenses such as rent and insurance. Then, list down all necessary expenses such as food, transportation, and clothing. Allocating money for emergency situations should also be an essential item in your plan. When managing your budget, consider the 50/30/10/10 rule. Set aside 50% of your funds for fixed expenses. 30% can go to necessary expenses. 10% can be allocated for emergency savings and the remaining 10% can be for the fun stuff such as socializing, shopping, and leisure. At first, your budget plan can feel unnatural. Make it feel like second nature by establishing an automatic deposit system according to your budget plan.
3. Saving should be a priority, not an afterthought
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You can’t effectively save for the perfect condo if saving for you is only an afterthought. Many people fail to save because they treat it as something that comes after everything else has been paid. Prioritizing saving will make your financial goals achievable. If saving is a challenge for you because you find tracking expenses confusing, use simple apps like Mint, Daily Budget, Spending, and Simple Daily Budget. The beauty of saving apps is they make your financial situation easy to understand. When your budgeting method is clear to you, you can easily save and keep your finances under control.
4. Get out of debt ASAP
Debt keeps you from your financial freedom. Avoid funding your lifestyle with debt. This means avoiding credit cards or getting a new loan. Some people get a credit card just to buy a new laptop or cellphone. Doing this can put you in serious financial trouble. By not incurring new debt, you can focus solely on the debt you presently have. If making a big purchase is part of your short-term budget plan, an effective way to go about it is saving first before making the purchase.
5. Reduce transportation cost
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Renting a condo has plenty of benefits for your savings, and one of them is reducing transportation costs. When hunting for the perfect condo, people consider the distance to their workplace. The ideal condo location should allow you to forget about car insurance, gas, and repairs because you should be able to walk or bike to the office. Relying on a bike and your two feet is a healthy and easy way to collect huge savings. While public transportation is an option, consider carpooling as a convenient alternative.
6. Avoid impulsive buying
Imagine being tempted by an airline seat sale. Will you go for it? The temptation can be difficult to resist. However, if it’s not part of your budget, it’s best to avoid making impulsive buying decisions. A “piso fare” can have a number of related travel expenses such as hotel accommodation and food. If an item is not a necessity, think hard before buying it. A lot of millennials waste money on unnecessary things. Some expenses you can consider cutting out are monthly magazine subscriptions and cable TV. The next time you feel like making an impulsive purchase, ask yourself if you actually need it. Remember that if you want something, what you should do is incorporate it into your budget plan.
7. Prepare your food at home
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One of the cheapest and healthiest ways to save is preparing your food at home. Eating out regularly can diminish your savings. You can whip up delicious meals without going over-budget. Bear in mind that it may take some time before you get the hang of it. You may also consider reducing your meat intake. Eating more vegetables is not only healthy but also budget-friendly. Healthy food choices will help you avoid costly illnesses. Want to treat yourself and your partner to a meal in a new restaurant? Consider eating out at lunch or in the afternoon. A lot of restaurants offer lower-priced menus around lunch and more expensive meals for dinner.
8. Stay committed to your financial goals
Sometimes it can feel easier to spend than save. Finance is not just about money; heavy emotional baggage is often attached to it. Of course, nobody is perfect. Mistakes happen. When you feel like giving up on your goals, a good way to keep your focus is to go back to your plan. Appreciate the progress you’ve made. This will help you gain a sense of accomplishment and help you see problems quickly. Discussing a financial dilemma with a family member, friend or expert can help you overcome hurdles. The important thing is you keep yourself grounded and aware of the challenge.
How to save money each month can feel like an unfathomable mystery, but following these 8 saving tips can be the key to achieving financial success in 2018. While saving requires discipline and dedication, the great rewards of saving make your efforts so much worth it.