4 Simple Tips To Save Money30 Apr 2021
Saving money is the foundation of financial security. It is the act of setting aside income first, which is one of the cardinal rules of personal finance. But while saving money seems relatively straightforward, many people find it a challenge just to get started for various reasons.
Putting away money doesn’t have to be difficult. If you’re feeling overwhelmed or unmotivated, these simple tips can help get you in the habit and become more aware of your finances and spending habits:
1. Set up a monthly automatic savings plan
One of the easiest solutions to avoid any excuses for not saving is an automatic savings plan. When you put your savings on autopilot, this ensures that no matter what, you will set aside a portion of your income effortlessly, without having to think about it.
Sign up for an automatic savings plan by arranging for your bank to transfer a fixed amount of your choice from your salary account into your savings account.
2. Create a budget and track your spending
To know how much money you can save, it helps to have a budget and keep track of your expenses. This will give you a sense of control over your funds, as you’ll be able to see how much income you have, and how you’re actually spending it. You may be surprised to discover that you are spending far more than you realise. This information will help you determine the areas where you can cut costs.
Tracking your expenses is now easier than ever, thanks to the plethora of personal finance apps available, many of which are free. Check out this link for some of the best ones that are worth trying.
3. Separate your wants from your needs
Needs are the essentials that enable you to live and work, such as housing, transportation, clothes, food and electricity. Wants are meant for fun and leisure - they are not must-haves but they help make life more enjoyable. Common wants include entertainment, travel, designer clothing and other premium products.
Sometimes, the lines can get blurred when a want seems like a need. For example, clothes are a need. But do you really need to get another jacket when you already have three that are still in good condition?
The best way to tell your wants and needs apart is to ask yourself these questions:
- Do I really, actually, truly need this?
- What would happen if I didn’t buy this?
- What would happen if I bought a cheaper version instead?
Knowing how to differentiate between your wants and needs will help you greatly reduce your spending and increase your savings.
4. Use promo codes and cashback offers
Whenever you shop online, check for any promotional codes which you can take advantage of to get discounts and savings.
Do also check out cashback sites like ShopBack, which rewards you for spending money by giving you money! Simply sign up for a free membership with the cashback site of your choice, and use it as your shopping portal. From there, click on the link that will take you to your preferred retailer’s site and complete your shopping as usual. After the cashback site verifies your transaction, a percentage of what you spent will be returned to you, based on the amount of your purchase and the cashback offer at that time.
Spending money is arguably more fun and exciting. But, there won’t be enough for you to spend if you don’t save it first.
Ultimately, saving is more rewarding in the long run. With an understanding of your budget and your spending habits, you will start putting away more money than you ever expected and be on your way to financial security.
Here’s another way to help you save - an endowment plan, which also provides you with financial protection at the same time. A win-win! An example of this is Gibraltar BSN’s Cash Star, which you can check out here.