Whether it’s for upcoming retirement or for the future needs of your family, getting to your financial goals begins with your savings. You might even put some money away to help you start a small-business in the future; if so, our article will give you a few tips to keep track of your spending!
Savings are the best and most important way to ensure that you are financially safe and learning how is easy.
Savings don’t just mean getting a discount at the time of purchase. It also means putting away money for a rainy day and pretending that you have never seen it.
So, we’ve created a list of six money-saving ways so you can save for your short-term and long-term saving goals.
1. Monitor and record your expenses
The first step to do when starting to save money is to figure out how much you are spending. You should record all your expenses.
In other words, you should keep track of all your bills and household groceries. You can do this with an Excel spreadsheet – keep your receipts and log all the information so you have a digital record of your spending.
Once you have the data, you should organize the numbers by categories such as gas, groceries, mortgages, and total each amount. Compare this record with your credit card and bank statements to make sure it’s accurate.
2. Create and stick to a budget
Once you understand your expenses for a month, you can begin to organize your recorded expenses into a workable budget. Your budget should describe how your expenses compare to your income so that you can plan for expenses and limit overspending.
Be sure to consider expenses that occur on a regular but not monthly basis, such as car repairs. Use your spreadsheet and records to try to maintain an otherwise consistent budget.
No matter what you do, the key is to learn for yourself that once you start saving money, the money is no longer yours. When you put some of the money away into a savings account, imagine that it has left your control – you should only touch this money in outstanding circumstances.
3. Eliminate Your Debt
If you want to save money by budgeting, but you still have heavy debts, it’s a good idea to focus on clearing these.
Add up the money you spend on debt repayment each month, and you will soon realise it’s better to get rid of them as soon as you can.
Once you are free from paying interest on your debt, that money can be easily deposited into your savings.
In terms of savings, monthly debt repayment is the biggest thing that robs you of your income! So, try to get rid of it as soon as possible!
4. Find ways to cut down on your spending
If your expenses are so high that you can’t save as much as you want, then it may be time to cut back. Identify non-essential items that can reduce expenses, such as entertainment and dining out.
Find ways to save on your monthly fixed costs like TV and mobile phone bills. Try to save money on groceries by planning out your meals each week and by taking a good look at what you already have in your house before you head to the supermarket.
Don’t be afraid to search for supermarket coupons or lookout for special offers as they can save you quite a bit of money!
Also, cancel subscriptions that you don’t use frequently. And be sure to turn off automatic renewal at the time of purchase. If you cancel and decide you can’t live without it, subscribe again, but only if it meets your new and improved budget.
For those subscriptions that you really want to keep, consider asking family members or friends if they want to share a membership and split the cost.
Many streaming services, like Netflix and Spotify, allow you to watch your much-loved shows and listen to your favourite music from two or more devices (using an upgraded account). That way, everyone wins!
5. Set saving goals
One of the best ways to save money is to set goals. Goal setting can help you visualize your savings.
First, consider why you might want to save.
Is it for a short-term goal such as getting married or going on a holiday? Or is it more of a long-term goal like saving for retirement or a funding a potential small-business?
Then find out how much money you need and how long it will take to save.
If you need motivation, set a savings goal and schedule an automated transfer no matter how big or small it is from your current account to your savings account every time you get paid to make it easier to save.
6. Spend now to save later
Let’s face the facts, utility costs hardly go down over time, so take charge now and make your home more energy-efficient.
Contact your power supplier to request an energy audit or provide an energy efficiency review for your entire home.
Once the energy audit is complete, it can help you decide what steps to do next to lower your energy bills.
This can range from simple improvements such as sealing windows and doors to the installation of new insulation or high-efficiency appliances and products.
Over long periods, you may find that you could save thousands in utility costs.
To wrap up
These six steps should help you kick start your savings journey but also reviewing your budget and keeping track of your progress every month will help massively!
This will not only allow you to stick to your personal savings plan but will also help you quickly identify and solve problems.
Understanding how to save money may encourage you to find more ways to save; putting money away for a rainy day – whether it’s to open a small-business or plan for retirement – could end up being a saving grace in the future.
If you need help from an accountant to manage your tax payments or help you reduce expenses, take a look at our guides to see where we might be able to help you. Otherwise, if you feel ready to outsource your financial management, contact us today.