When it comes to saving more money every month – it starts with tracking one’s monthly expenses and assessing one’s incoming and outgoing money more closely.
Everyone dreams about putting more money into their savings accounts every month. But the truth is that saving money is not as easy as it might look on the surface. However, there is no need to get disheartened. Sometimes. All you need is to incorporate small changes to your money-spending and money-saving habits.
You will want to start by adjusting your daily habits by replacing bad habits with better ones. Also, you will want to create a roadmap and jot down your financial goals to see what you are aiming at.
Keep reading!
Stick to a Monthly Budget
Creating a monthly budget is one of the easiest and most practical ways to embark on a money-saving journey. The essential benefit of creating a budget is that it will give you a clear vision of your current money habits and how you could potentially adjust your spending habits in a way to add more money to your savings account.
In case you have never established a budget before, you might be scared at the thought of it. But – contrary to the myths that you might have heard about budgeting, such as that it takes away financial freedom – the truth is that you need a budget if you are serious about saving money in the long run.
Here are a few steps to follow that will help you start a budget:
Categorize Your Expenses
You will want to start your budget by categorizing your expenses by differentiating your wants and needs. A few examples of wants would be the following:
- Gym membership
- Restaurants
- Trips
- Charges for streaming services
A few examples of your necessities could include the following:
- Phone bills
- Mortgage Payment
- Debt repayment
- Rent
- Monthly utility bills payment
Assess Your Expenses
Once you have categorized your expenses, you will want to assess the areas where you could potentially cut down your spending. For instance, you could start working out at home and skip the gym membership, or find a roommate and lower your ren.t
Establish an Emergency Fund
You will also want to assess how much money you can place in your monthly savings account. Ideally, if you earn any bonuses, you will want to send the amount to your savings account instead of spending all the extra money.
It is important to mention here that you will need to set up an emergency fund and make it a crucial part of your budget. The emergency fund will work as your safety net against sudden expenses like car breakdown, sudden illness, unemployment, and medical bills.
Everyone’s financial situation is unique, but you might benefit from a common 50-30-20 rule, meaning that 50% of your monthly income will be spent on necessary expenses. You can then spend 30% on your wants, and the remaining 20% will go to your savings.
You can immensely benefit from budgeting apps, budget calculators, and a spreadsheet to efficiently track your expenses.
Set Monthly Milestones
Your spending behavior will be determined by your monthly milestones. After you have done the math and set up a monthly budget for yourself, it is time to set your weekly and monthly savings goals. And once you have established your savings goals, you will want to do your best to reach those goals by showing determination and discipline.
You can include in your monthly savings goals the following milestones:
- Putting a specific amount for your retirement plan.
- Spending a specific amount of money to pay your credit card debt.
- Putting a specific amount for your emergency fund.
The essential trick to reaching all milestones is to start with setting realistic goals that are actually doable and won’t put you under unreasonable pressure. And you will also want to hold yourself accountable; the best way to do this is by having an accountability partner.
When it comes to efficient saving, you will want to work smart instead of hard, and the best way to do this is by automating your monthly transfers that will go directly to your savings account. This way, your monthly savings will be automatically generated, which will also save you more money over time without you being required to perform any additional actions.
Improve the Way You Do Your Groceries
Many people lose track of their spending during their grocery shopping sprees. And believe us when we tell you that you can save loads of money by making small changes and improvements to your money-spending habits during your grocery trips.
You don’t have to make big changes – but – you will want to start by incorporating a few simple rules into your life. For instance, you will want to make it a top rule never to go grocery shopping when you are hungry; this way, you will buy way more than you actually need and intend to buy.
Also, you will want to make a list of all the things you need before you go to the grocery store. Make sure to check your pantry for all the things that you have so that you don’t buy anything extra. You will want to stick to a weekly meal plan to stop wasting food.
A weekly meal plan comes with loads of benefits, including that you will make healthier food choices by preparing meals from scratch at home instead of ordering food. Furthermore, with the help of a weekly meal plan, you can avoid making impulsive purchases, which will eventually lead to more monthly savings.
While there is absolutely nothing wrong with going to restaurants, you will want to have a good time eating out during the happy hours. You could also research which restaurants have food deals or offer discounts.
When deciding the menu, you could skip appetizers, dessert, and a second round of drinks. You could also split the bill with your dining companions. You will also want to ask which credit cards reward spending at restaurants.
You will be surprised to know how much of a difference these things can make.
