Saving money might seem a near-impossible task when you have bills to pay. For many of us, maintaining regular financial obligations like a mortgage, car payment, and groceries can leave little cash left over for savings. Even for those of us that have our finances under control, it’s always worthwhile to check if there are money saving opportunities elsewhere. If you'r serious about saving money, here are some steps to success.
#1 – Reduce Expenses When You’re Paying Too Much
A fundamental way to save money is to reduce major expenses in your budget, beginning with a review of your regular monthly bills. Recurring payments present an opportunity to cut costs. When you trim a monthly bill, it saves you money every month!
Sometimes reducing a regular bill is as simple as taking some time to see what else is out there. Look for better car insurance rates, or a discount if you bundle insurance products. Likewise, it’s worthwhile to spend a weekend afternoon shopping for bank accounts with lower or no fees, or switching to a better mobile phone plan. Saving as little as $9 per month will put more than $100 in your pocket over the course of a year!
And if you really want to make a dent in your monthly budget, try to see if it’s possible to refinance a mortgage for a lower interest rate. Since housing is often the largest expense in most budgets, focusing your spare time on reducing housing-related costs could very well give you the biggest expense reduction relative to the amount of time you spend researching.
After you’ve reduced major expenses, move on to cutting down smaller ones. Try to scale down utility bills and consider switching to generic instead of brand name foods at the grocery store. Once you start looking for opportunities to save money, you’ll be surprised how many you find!
Here’s how to do it - Give yourself a budget for each of the following:
Eating Out/Social Life
#2 – Start Budgeting
A good budget includes a category dedicated for savings, with a fixed amount you contribute each month. Finding the right balance for your budget isn’t an exact science. Some people will want to budget more for leisure, while others will be more saving-focused and can budget accordingly.If you need structure in your budget, though, one rule to consider is the 50/20/30 rule. It’s simple and surprisingly effective.
Here’s how it works:
50% of your budget should be allocated towards essential expenses
20% of your budget should be allocated towards income
30% of your budget should be allocated towards your own discretionary spending
#3 – Pay Off Debt
You have money going toward a balance owing that would otherwise stay in your pocket. To eventually reclaim this cash flow as your own, you need to pay off the debt.
The best way to save money on interest is to move your debt (or debts) to a lower interest rate. Balance Transfer Credit Cards can accomplish this, as they allow you to move your debt from a high-interest credit card to a lower-interest one. Other means of reducing the interest rate on your debt include personal consolidation loans or even taking out a consolidation loan from a life insurance policy.