Spending money is good, but saving is great! And, it all starts with budgeting which is the process of simply organizing your finances to make the most of them & to avoid being broken in the future. Whether you want to save for a rainy day or your Christmas shopping, budgeting is critical. Remember, it’s not about being harsh on yourself, it’s about setting a seamless financial position and doing what matters the most. No matter if you get paid on a monthly basis, or a weekly basis, or a bi-weekly basis, budget thoughtfully to have a sound financial position.
Budgeting plays a vital role in any decision-making process whether it is a person, an entity, or a charitable organization. In recent times, saving money is more crucial because many businesses around the globe are facing a tough time and unemployment has surged to a higher level than ever.
Without further ado, let’s find out what are some important saving tips on how to save money fast in 2021.
1. Monitor your overall expenditures
Start by making a list of your income and expenditures. Tracking down expenses is important as this impacts your overall level of savings. In doing so, always try to minimize expenses where possible.
For instance, instead of buying an expensive gym membership, you can work out in a local sports ground nearby. It reduces your over expense, plus working out in an open nature has more health benefits than a gym. So why not choose the second option?
2. Build a weekly budget
I think this is the best place to start, particularly if you are paid weekly or bi-weekly. As soon as you get your pay stub, identify how much you earn after the government taxes and deductions. Once you do that, use any of the available apps, gadgets, or even a simple notebook to list down your expenses against the income. You can include expenses like bills, rent, health, entertainment, groceries, and transportation in your weekly budget. It will give you an idea about how much your monthly expense is. In doing so, you will have a clear idea of your monthly expenditures prior to weeks, and you can save the rest of the amount.
3. Automate savings
Congratulations, if you have already automated your savings. If not, it’s never too late. Once you create a weekly budget, you will be able to determine how much money you can allocate toward savings. Often financial advisors recommend putting 1/4th of income towards savings per month. However, it varies based on your income, and your current financial situation. If you are already paying off a huge debt, perhaps you won’t be able to save this month each month. But in case things are in your favor you can save a quarter of your income. You can automate your saving process by authorizing your bank to allocate a proportion of money to your savings account on a weekly basis.
4. Allocate a tiny amount to a fund
Withdraw a small amount like $60 or $80 from your account each month and put the cash aside. Although it will not accumulate any interest, at the end of the year you will have more than a thousand bucks as a small saving. It will be the backup fund that you can use to purchase a smartphone, another gadget, or for new year’s shopping.
5. Create a tax fund
Just like a cash fund, deduct your tax amount every month and put it in a tax fund box. For instance, if you are making $6000 a month, put away $1200 (20 percent) every month. By doing this you will be less worried and pressurized as you can easily pay off your taxes with this amount.
6. Plan to purchase necessary items in advance
Don’t miss out on off-season sales or deals. Famous stores offer end season deals and discounts and that’s the best time to make purchases at an affordable price. You will get branded items at a lower price and will also save money.
7. End your auto-renew subscriptions
End your subscriptions right now. Always subscribe to the service that you need genuinely. More than often we do not avail yearly subscriptions. Just like that, you might not need a Netflix, internet, or any other subscription package during your holiday season or during the months when you are too busy. Therefore, it is always better to turn off auto-renewal. Doing this will save you from being charged which in turn will save you money.
8. Redeem your loyalty points, & credit card rewards
Make use of your loyalty program points and gift cards as they may expire after certain times. Don’t wait around and maximize the value of loyalty points and credit card rewards by redeeming them immediately. Often people hoard them for big future redemption, but the longer you have them the less value you will receive. Therefore, it is not the best strategy.
Redeem your rewards regularly, wherever you can.
9. Make a grocery/meal list
Make a list of grocery items that you need each month. Having a list in place before actually shopping will allow you to buy what’s needed and you will avoid buying random items.
Great if you are working from home, but if you need to drive to your office, it’s good to pack your lunch from home. It will help you save your money that you’d spend going to the cafeteria or local food stall otherwise. Plus, home food is considered healthier and will also save you money.
10. Pay outstanding debt on a timely basis
I can’t emphasize this more. The credit monitoring service at the bank monitors the payment pattern of any customer. Credit history affects your credit score. If you are paying your debt in a timely manner and you have no negative remarks – great! But, a bad payment pattern will attract negative remarks, and higher interest rates which in turn will increase overall cost which means a cut in savings. So, it is always better to check your credit report at the bank.
Have you been adopting any money-saving habits lately? If not, now is the right time to start, and save your first $.