Many people get caught up between spending money and saving money. On one hand, it’s important to set money aside for future expenses.
On the other, it’s also important to live your life and enjoy the things you want to do.
If you’ve been having a bit too much fun lately and happen to have no savings, though, there is certain information that you need to know.
Let’s look at a few key money-saving tips that you need to keep in mind.
1. Create a Monthly Budget
It should come as no surprise that developing a monthly budget is one of the most important things you need to do if you don’t have any savings now. Interestingly, many people are surprised to learn where their money goes.
To get started, you need to look at a record of all your expenses over the past few months. This means that your budget should include more than basic necessities like rent and utility payments.
Check your credit card statements, debit card transactions, and even the receipts that you may have lying around.
This will give you valuable insight into why your savings account is dry.
For example, you might find that your entertainment spending on weekends is nearly $1,000 each month. Without a proper budget in place, it can be highly difficult to have a strong grasp of how much money you spend on a regular basis.
2. Eliminate Unnecessary Expenses
Once you’ve mapped out your monthly expenses, you can begin to get rid of purchases that you could do without. Most people choose to start with subscriptions, gym memberships, etc. that they don’t use.
After all, there’s no point paying for something that you don’t get any value out of. Then, you’ll need to figure out which expenses you could reduce or get rid of entirely.
For many people, purchasing alcohol and going out to eat are problem areas. After all, a single night out for dinner and drinks can easily exceed $100-$200.
If you’re someone who likes to do this multiple times per week, you could be severely mitigating your ability to save money.
The good news is that having a little discipline when it comes to spending goes a long way. Even a few months of spending less could put thousands of dollars in your bank.
3. Pace Yourself
As previously mentioned, there needs to be a balance when it comes to spending and saving money. If you attempt to aggressively save every penny that you earn, it can be difficult to enjoy life on a regular basis.
For example, you might find yourself spending more time with friends or exploring your city simply because certain activities cost money.
Ironically, sacrificing enjoyment for saving money could lead to a situation where you overspend on unnecessary expenses to reward yourself.
Instead, set a goal for yourself in terms of how much money you would like to save. This could be any amount, and it will highly depend on your income and monthly expenses.
However, the goal that you set should be something you can comfortably reach within the first month. Once you prove to yourself that it’s not as difficult as you anticipated, you can aim to save more money next month.
Setting higher goals for your savings is also a great way to put yourself in a position where you need to increase your income. For instance, knowing that you need to save an extra $500 within the next week or so, can force you to come up with creative ideas for a side hustle or weekend job.
4. If You Have Debt, Make a Plan
Debt payments can be a major factor that hold people back from saving the money that they need to. Unfortunately, many people are unaware of the fact that making minimum payments on your credit cards can keep you in debt longer.
For this reason, it’s highly recommended that you aggressively pay off any debt that you have. At the very least, you should ensure that you do not let your outstanding debts go to collections.
This will have a catastrophic effect on your credit score and cause far more complications than you experience by simply saving the money to pay them.
5. Set Aside Money for Retirement – No Matter How Little
Many people choose not to invest their money in a retirement fund due to feeling as though they cannot contribute a significant amount. The truth is that any money at all is a significant amount.
Even if you contribute $50 per month, this amount will drastically increase over 30 or 40 years.
For instance, let’s assume that you deposit $50 per month over a 30-year period. Let’s also assume that you get a return of 7%.
After this time has lapsed, you’ll have over $50,000 in your account!
No savings and struggling to pay your next bill?
The above guide will help ensure that those who currently have no savings can get themselves on the right track. From here, you’ll find that saving money is not as complicated as you might have thought.
However, if you have an immediate cash need, apply now for a loan from Jora Credit.