Ways To Save Money
- Record expenses
The first and important step in saving is to know how much you spends. A person who doesn’t know how much he spends cannot save even a single penny.
Keep a record of everything how much you spends and on which thing you spends for one month. That means food, clothing, fuel, luxuries, etc. Everyone keeps a record of their major expenses but you should give attention to your minor expenses. This requires a serious attention while recording your expenses.
Tips for recording expenses:
- Keep a notebook with you all the time.
- Record each and every expense in that notebook or you can use apps that are available to keep your record of expenses.
- Save your receipts and divide them into categories at the end of the month
- Make a budget
It is easy to set goals for saving, but if you don’t have a record of your expenses then it is quite difficult for you to achieve that goal.
Now that you have a good idea of your expenses, you can make a tight budget. This budget will help you to cut your over-spending and help you to save money.
Example of a budget for an income of R8,000 per month is as follow:
- Housing/Utilities: R1,000
- Food: R1500
- Student Loans: R1000
- Petrol: R500
- Internet/TV: R370
- Savings: R500
- Luxuries: R280
Tips for making a good budget:
- Keep a record of your expenses and divide it into categories at the end of the month.
- Save your receipts and divide into categories at the end of the month.
- Reduce your luxuries expenses in you budget.
- Make a plan to save money
Now that you know your expenses, it’s time to make a plan to save money. Create a savings category in your budget and allow 5-10 percent of your income in this category. If your expenses are high and they are not allowing you to save that much then you have to cut your expenses.
Tips for making a savings plan:
- Make a category of savings in your budget and put your 5-10 % of your income into it.
- Take a deep look at your expenses and try to cut your non-essential expenses.
- Increase the money in savings category as high as possible.
- Set savings goals
It becomes easy to save money when you knows that you have a thing to save money for. Set saving goals that are within your reach and make hard decisions to save money responsibly. Some goals require may take years or some may take months to achieve. It is important to monitor your progress on regular basis.
Short-term savings goals that are achieved within two years can include:
- Saving money to buy a new car
- Saving money for vacation
- Saving money for an emergency
- Saving money pay debt
Long term savings goals that take several year or even decades to achieve can include:
- Saving money to buy a new house.
- Saving money for your child’s education
- Saving money for setting up your own business
- Saving money for retirement
- Tips for setting savings goals:
- Set goals that are within your reach
- Set savings goals according to your needs
- Decide how long it will take to achieve that savings goal.
- Cut your expenses
If your expenses are high then you will face difficulty in saving money. You have to cut your expenses to save money. Look for non-essential expenses on which you can spend less such as entertainment, dining out, long drives, luxuries, etc. This will help you a lot in saving money.
Tips for cutting your expenses:
- Remove or lessen the luxuries from your budget.
- Unsubscribe from the optional internet and television packages.
- Use the inexpensive car for trade that is fuel-efficient and cheap to maintain.
- If you live in a rented house then look for a new house that has a better deal.
- Select cheap and healthy food. Select raw and fresh food than buying prepared food.
- Look for discounts when you are shopping.
- Reduce your energy bills by:
- Turning off lights when you are not around.
- Lessen the use of heaters and ACs.
- Produce your own clean and renewable energy using solar panels and wind turbines.
- Use cheaper forms of transport such as public transport.
- Avoid or lessen your expensive addictions such as smoking, drinking, drugs, etc.