As a financial expert, one thing I get asked by people who’d like to work with me is, “ Do you have money-saving hacks I can use? How can I save more?”
I’ve helped many people achieve financial freedom by teaching them how to save and manage wealth. Today, in this article, I will provide five practical saving hacks that can help you reach your financial goals through saving.
Want to learn more? Let’s get right into it.
Why You Need to Start Saving Money
Before we get straight into the tips you can save, let’s first answer the simple question: Why do you need to start saving?
You don’t want to live from paycheck to paycheck. Things can turn out disastrous at any time. For instance, you could lose your job, or an emergency, such as a hospital bill, could come up when you least expect it.
Such occurrences make it essential to learn several money-saving hacks to prepare you for a rainy day.
Other reasons why you’ll need to save include:
– It offers peace of mind
– People who save are happier than those who don’t
– It’s easier to meet life goals when you have a savings account
– You cover emergencies with ease
– Savings also help you prepare for retirement
How to Start Saving Money
When clients ask me what money-saving hacks they can use, two basic things come into play when considering how much money they can save.
– Income/ revenue: how much money do you make?
– Spending habit: How do you spend the money you make?
Here are a few general money-saving hacks I normally give my clients:
1.Set a Higher Income Goal
How can you start saving money if you don’t have an income? On the other hand, if you don’t earn a lot, it can be difficult to save more money than you should.
That’s where setting a higher income goal comes in handy. If you normally have a lot of time, consider getting a part-time job to supplement your income. Additionally, you could also start a side hustle.
When you get the extra amount of money, save that money. Don’t use the money for anything that you don’t need.
Additional tip: If you want to learn more about handling your finances, you can hire a financial expert to help you with this. You could also enroll in a personal finance course, which you can find online. Check out a few online courses in our recent article here.
2.Get out of Debt
If you don’t have any debts you don’t have to pay, feel free to skip to the next point. However, if you have pending debt that you need to pay, you need to consider how to pay it off.
Debt is good because it can help you sort out small emergencies that may arise when least expected. However, debt can be unhealthy since it hinders your financial future and growth because you have to pay them with interest.
An article on the Department of Financial Protection website suggests that if you want to save more money, start by making minimum payments on each debt you have. Use your money to pay off debts at a higher interest rate. In the end, you’ll find that you’ll save more money than if you didn’t pay the debt on time.
Also, take advantage of discounts and credits. For instance, homeowners insurance discounts are a good way to save on insurance premiums.
3.Eliminate Unnecessary Spending
If any of this represents you, my advice is to get rid of it. Most people get into debt because they pay for things they don’t need. For instance, they could have a monthly Netflix subscription, yet they rarely watch money. They could also have an internet subscription, yet they are always working.
Others, on the other hand, spend money on things they don’t need. For instance, they could come across a good-looking dress and choose to buy it without considering the consequences of that decision once they make that purchase.
A good money-saving hack, in this case, is to cut off on unnecessary spending:
– Embrace carrying cooked food to work
– Stop monthly subscriptions that you no longer need or rarely use
– Avoid impulse buying
– Don’t go on a vacation without planning for it
4.Scale Down
In addition to reducing your spending, scaling down is another money-saving hack you should embrace. What does this mean?
Let’s say you have rented a 4-bedroom home yet live alone. Renting such a big home could be a waste of money since you only use one bedroom. You can save money by moving to a 1- 1-bedroomed home. You could also rent out the available space to get some extra income on the side.
According to an article on Cleveland.com, scaling back/down can yield unexpected benefits, such as regaining control and taking ownership of how you spend your money.
5.Save with a Goal in Mind
One tactic that has helped most clients I work with is saving with a goal in mind.
Let’s say you want to buy a new TV. The best way to get all the money you need is to create a separate savings account for this. Set a goal of adding a certain amount to that account every month. Ensure that the account you create is not the same as your transaction account.
According to this article, having a savings plan will ensure that you focus on the goal and help you decide the best way to reach it.
Conclusion
That’s it for today. We have come to the end of the article, and I hope these points are helpful. Remember, everyone’s financial situation and goals are different. Therefore, ensure that you customize your saving plan depending on where you are starting from and the goals you want to achieve.
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