When it comes to financing and money saving as an individual or a business owner, you need first to create a budget. It seems easy, but experts in the field say it is easier said than done. They state that when you create a budget for monitoring your expenses, it is hard in the beginning to stick to it. You need to develop a plan that is practical and simple for you to follow. This post is a step-by-step guide to help you kick-start a budget and save on your finances!
6 Real and Simple Ways to Save Money!
Saving money might seem challenging; however, it is not impossible. The following are 6 simple and real ways for you to save money and keep your finances in control-
- Keep a detailed record of all you spend- This is your first step to save money. You just have to keep track of the items you buy and where you spend. Simple things like a cup of coffee, mortgage, groceries and more should be listed and written. Once you have your list in order the next step is to group them under various categories like groceries, gas, mortgage, etc. Once you have placed all the items in the category, make a total of the items and write them down. Compare them with your bank statements and credit card bills. In case, you do not have the time nor the inclination to create categories; you can use free online budgetary tools to help you.
- Create a workable budget- When you have completed your list, you now have your income and expenditure in front of you. This is the sum you save and spend in one month. Now, it is time for you to organize these costs into a budget that works for you. The budget should give you a correct idea of how to spend your income wisely so that expenses are in control and you get a sum to save every month. This helps you to stop overspending as well. In addition to the high costs, there are some non-recurring expenses like car maintenance and servicing that does not take place every month. So, here make a provision for miscellaneous expenses that are not regular but might crop up in a month. Examine the list and proceed to the next step.
- Plan on saving every month- With your budget for the month in place, the next step for you is to create a savings category for every month. Experts in the field of financial management and debt control say you should try to save at least 10 to 15 percent of the amount you earn every month. In case, you tend to overspend and cannot even save; it is high time for you to cut back on your expenditure. You need to control expenses like entertainment and dining at restaurants. You can cook your own food and save on the money every month. You should consider placing your savings amount in a bank account created only for saving under the expenses list so that you will have your savings in place.
- Set a goal for savings- Esteemed company in the field of debt relief, Nationaldebtrelief says that you should have a goal to save money for. This helps you in a great way to save money and also create an emergency fund for the future. For instance, you can set both short-term and long-term goals like going for a vacation or even creating a financial cushion for your retirement plan. You have to check how much money you need for the goal and start saving on it. However, if you are planning to save for your child’s education or retirement, make sure you put all the money into an account for investment like 529 Plan or an IRA account.
- Check on your financial priorities- After monthly expenses and income, your financial goals highly impact the way you allocate savings every month. Here, you need to plan for both short-term and long-term goals. Remember, saving for a long-term goal does not mean that your financial goals for the short-term take a back seat. This is where you must learn how to prioritize the goals for saving so that you are aware of precisely where you are saving every month.
- Choose the right savings tool- You need to choose the right tools for savings. Make sure that you save money in a savings account or a certificate of deposit that is also called a CD. This locks your money for a long period of time at a rate that is more than a bank savings account. If you wish to choose tools for long term goals, you may choose IRA accounts for retirement as they give you a lot of tax benefits. There are financial securities like mutual funds and stocks that help you save in the short run and long term as well. However, note that the bank does not monitor these financial instruments and so you must ensure that you are aware of their terms and conditions. They are always subject to risks, and if you do not exercise discretion, you might face the loss of the principal amount as well. Financial experts suggest that you should just pick a single account, you should consider the available options and choose the one that suits you. Make sure you check rates of interests, fees and the need to keep minimum balances so that you are not penalized. In case, you are not sure about a financial instrument, make sure you talk to experienced and skilled professionals in the field to clear doubts and suggest whether the said financial instrument is ideal for you or not!
Therefore, if you really wish to get rid of your financial woes, make sure you follow the above money saving tips for your finances. With the right budget and discretion, you can take control of your finances and say goodbye to tensions and debts with success!