Saving money is important for financial security and financial emergencies. In case of an emergency, you won’t have to put yourself in debt – instead, all the costs would be covered through your emergency funds and savings. Other than that, you can easily plan your family’s future and commit to different pursuits, such as your child’s education. With the increasing amount of educational expenses, you can afford it all without going into debt or loans. The importance of savings cannot be overstated.
Now that the importance of having a rainy day fund is covered, we can move on to the next step; how to save money. Here are some money-saving tips that you can use in your day-to-day life:
Set a goal
No plans ever succeed without a goal. Visualize a target that you need to save for, it could be anything from shopping to buying a house or many even for your wedding or retirement plans. Research the amount you need to save to cover the costs and set aside about 20 to 30 percent of your monthly income into a savings account.
Manage your spendings
Many of us find ourselves waiting for our bank statements to determine our spending of the month. But then you only clear out the arrears in your statement and leave nothing for yourself. Instead, keep a record of every penny you spend via expense tracking apps such as Wally or manually round up all your purchases in a notebook. This way, you’ll start saving more once you realize you are spending on things you don’t need or could easily live without.
You can save hundreds annually from your utility bills alone. Simple, turn down the thermostat in your house, switch up to an inverter instead of a regular AC, adjust the temperature in your refrigerator, purchase energy-efficient appliances, always turn off all unnecessary lights in your house and instead use dimmer switches or LED bulbs.
Cancel unnecessary subscriptions
Let’s be honest and face the facts, you don’t go to the gym regularly and availed that membership, or in some cases, you haven’t even visited the gym in months, especially due to the widespread COVID. Cancel such unnecessary subscription boxes or services that you don’t use regularly.
The 30-day rule
Another saving method is the 30-day rule which is quite simple. If something catches your eye while you’re walking past a store or scrolling through social media, then save that item in your mind to spend on it later. You can place all the remaining money in your savings account that you would have spent on that item and do that till the end of the month. Once your 30 days are over, you can purchase that item. This is a quick and easy way to save an amount of money in a month.
Get a savings account
Keep your daily use bank account different from your savings account. This would reduce the tendency to go beyond your budget.
Spend less on food
A large sum of money is spent daily on your lunch or eating out on a daily/weekly basis. Instead, pack your lunch and commit to eating out only once a month. Bringing your lunch will even give you the freedom of variations in your daily food and would be cost-friendly.