10 (Easy) Ways To Save Money | How to save Money with low income | Money management tips
One of the main goals people have especially at the beginning of the year is to save more money but according to the ARP P more than half of American households lacked an emergency savings account including a majority of people over the age of 50 this puts people in a vulnerable position financially. Many people are vulnerable to falling into debts if an unexpected expense happens if a car breaks down for example and there’s not enough money to pay for it is likely that people will get into debt.
In order to fix it putting them behind on their financial goals saving money is also one of the first steps of building wealth. Saving money to invest can allow anyone to build wealth for themselves and their families This is without mentioning that the peace of mind that having a reserve of money provides can create a less stressful life and allow people to navigate financially tough decision with less financial worry. Let’s discuss about ten ways you can save more money this year.
Understand personal finances
It can be difficult to begin saving when we don’t understand around finances; a simple way to keep track of our saving potential is by organizing or finances into three main categories.
- The first category is for income here we write down how much we made each month this includes all of our sources whether it’s from a job a side hustle a business or investment income.
- The second category is for living expenses here we have the necessary expenses we need to live like rent utilities or groceries usually this number doesn’t change all that often.
- The third category is for non-essential expenses these are things that we like yet we don’t really need it is important to be critical here and not write down these expenses into our living expenses. Category once we do this we compare our income with our total expenses and see if there’s any money left over and that is your current saving potential. If there’s not much money left over we would need to focus on reducing expenses starting out with our non-essential category.
Have a clear savings goal
Many people get a paycheck pay their dues enjoy their hard-earned money and if there’s anything left over thesis left to save this leaves their saving and uncertainty because some months they can save and some months they don’t; a great way to help us prioritize our savings is by creating a savings goal it becomes easier to take action when we have a clear and specific goal so let’s say that this person, let’s call him Adam he wants to save ten thousand dollars this year.
This can sound like a lot at the beginning, but let’s break it down into actionable steps in order to save ten thousand dollars Adam needs to put away eight hundred and thirty four dollars per month.
If he gets paid every two weeks this means that he will need to save four hundred and seventeen dollars per paycheck, or two hundred and nine dollars per paycheck if Adam gets paid weekly; this might sound a little difficult especially if we don’t have eight hundred and thirty four dollars per month left over after expenses. But let’s think about this if the government added an extra tax of eight hundred and thirty-four dollars per month; whether we like it or not we would have to pay it and adapt our lives accordingly.
Automates your savings
It can be hard for many to save money because it is easier to buy things that we want or think we need; especially now with automatic charges and subscriptions that might seem small at first glance, but end up being a significant amount in the long run. When savings are automatic there’s a less likelihood that we’ll spend this money on unnecessary purchases. It is easier to set up automatic transfers from a checking accounts to a savings account or even transfers to another Bank.
Most people who receive direct deposits from their paycheck can ask employers to automatically deposit a portion of their check into a different savings account making it easier to save money because it’s all automated. This is like creating personal tax on ourselves typically the government takes taxes before people receive their paychecks making it easier for people to pay their taxes. In the same way automating our savings makes it saving money fairly effortless.
Now it is important that if we’re automating our savings to adjust our lifestyle accordingly it can be easy to continue our normal lifestyle and spend the same amount of money even when we are putting more money away in our savings. For example, let’s say that our friend Adam makes four thousand dollars per month twenty seven hundred go to pay his living expenses and another 1000 are spent in non-essentials this means that he has around 300dollars left over.
But he decided to automate 834 dollars from his paycheck into a savings account and he didn’t change his current lifestyle. This means that he only receives three thousand and one hundred and sixty-six dollars after his automatic savings yet he continues to spend thirty seven hundred dollars forcing them to use that. At the end Adam will have to take money from his savings to pay for his debt simply because he did not adjust his lifestyle to his savings goal plus he would have to pay interest on top of what he already owes.
Avoiding debt is always a smart idea especially for this credit card debts with high interest rates, but if we already have debts that will take some time to pay off a good idea might be to consolidate. This high interest credit card debt into a lower interest or no interest line of credit interest rates on many credit cards can make it harder for people to pay off their debts, but there’s a few credit cards or lines of credit that offer no interest for a small period of time allowing the person to pay off their debts faster by not having to pay interest.
Now, it is important to do research and oral consults for the financial planner to identify benefits and drawbacks of this method many of these cards might have some transfer fees making it unproductive to transfer the debt. So make sure to do your research or consult with a professional before making any decisions.
Many Bank accounts round up your expenses to the nearest dollar learn automatically deposit them into your savings account. For the most part you will hardly notice the extra money gone making it a great little hack to save with no effort make sure to check with your bank and see if they offer the service.
This is a simple strategy in which its main goal is to create financial discipline. This allows you to separate and group money into different categories. For example, let’s say that you allow yourself Eight three hundred and fifty dollars spending budget to do with as you please. So you take that money out in cash and now it’s separated from the rest of your money and once the money is gone it’s gone some studies have shown that people buying with cash tend to spend less than those using credit cards.
There is something about taking physical money to pay whether we become more aware of the value of our purchase or it’s just simply more inconvenient that leads us to spend less. When using cash now those who are already disciplined and stick to their budgets using credit cards might be beneficial due to the rewards they offer. But if we need a little practice with this discipline using cash would be a good way to start.
Use the 30-day rule
This allows you to lower your spending on unnecessary expenses by allowing time between the feeling of desire to buy something and actually purchasing it. For the most part we want something and we buy it especially now that we can buy something in seconds using our phones or computers with one simple click but what if we puta thirty-day distance between wanting something and actually buying it.
Most find that after 30 days of waiting they no longer want the product and it’s something they can live without see most purchases are emotional decisions that. If we allow time for our emotional state to change we might end up not really wanting something as much as we thought saving us money.
Buy off season
Supplies whether you’re taking a vacation or buying clothes this little hack can save you a significant amount of money. For example, most clothing stores mark up the prices of winter clothes in winter and discount them at the end of the season by timing it right we can buy Oliver winter clothes right before the new season arrives allowing you to pay less for the same items.
Another example, is traveling off-season plane and lodging prices tend to skyrocket when it’s peak travel season and tend to drop off season. For example, a four day round-trip ticket from LA to Guadalajara Mexico and December 23rdcosts around $1,000 the same four-day round-trip in March is over 80 percent less than the December. Tickets costing only around 150 to $200 so deciding to wait for a product to go down in price or planning a vacation offseason can help you save a significant amount of money.
Make it a challenge
Who said that saving money should be boring make it a challenge do not spend money for a month and find fun things to-do at home. Instead of going out for dinner or bar hop with friends which can cost anywhere from $50 up to a couple hundred dollars or more a game night at home, can be just as fun and cost considerably less than a night out making not spending money. A challenge can help us be creative and finding fun ways to enjoy ourselves while saving money.
— Susanna Tips and tricks
What is financial freedom? This is a question that many people ask, but it is not always easy to answer. Financial freedom means different things to different people. For some, it might mean being able to quit their job and travel the world. For others, it might mean being able to provide for their family without having to worry about money.