If you’re not a millionaire, it’s harder to afford expensive purchases. You can make it easier by saving the right amount of money. To learn how to save and figure out how to save properly, it is enough to know and follow a few basic rules of financial literacy.
Use the “Pay Yourself First” Rule
With each money receipt, first set aside a certain amount and only then distribute the remainder.
Widespread advice is to set aside 10-15% of your income each month to quickly accumulate money. You can also start with less. If you spend all of what you earn on living expenses, then 10% may be too much. In this case, it is important to accustom yourself to save even with a modest income and painlessly for the family budget.
Start with 1-5% of your salary. It should be easy to save to form a habit. Gradually increase the amount you save regularly, and be sure to increase it with each pay raise. Bonuses and property sales should also be set aside, but at a higher rate of 30-50%.
Keep Track of Your Expenses
To figure out how to save money, you need to figure out how you spend your money.
Start writing down expenses, keeping track of every purchase, no matter how small. Keep track of your spending by category, for example: groceries, transportation, utilities, entertainment. After a month, you’ll know how much you’re spending on each one.
Analyze the results. You might find that you can spend less in some categories, or that some purchases are easy to do without. Do you really need coffee on the way to work if you have it in the office, or could that money be put aside?
Make a budget for the next month. To do this, think about the amounts you spent last month on each category of spending, and try to optimize them – abandon unnecessary purchases, save money on something. To start saving money, set limits for each of the major categories. This money should be enough for all of your expenses in the corresponding category in the next month. These are limits that you should not go over and that together make up your budget.
For example, if you spent $500 on entertainment last month, then by deciding not to spend on gambling via a Bob Casino login and limiting the number of outings to coffee shops, you budget $100 more for that category. So $400 is your entertainment limit for the next month. In the same way, determine how much you will spend on groceries, transportation, and the rest. That way you’ll know how much money you need to live on and how much free resources you have.
For major seasonal expenditures, set aside money in advance, so you don’t have to reshape the family budget and make major cuts in other categories when it comes time to buy winter clothes, for example. Start saving a little bit at a time a few months in advance.
As a general rule, when a person starts tracking, analyzing, and controlling spending, the very 10-15% of income that is recommended to save is freed up.
Stay Within Your Limit
To make it easier to stay within your spending limits, set aside money for each category. If you use cash, have envelopes labeled “For groceries,” “For entertainment,” etc. For money on the card, you can open separate virtual accounts or cards for each category. At the beginning of the month transfer a certain amount and try not to go out of it.
If there is money left in your envelopes at the beginning of the new month, add it to your savings.
Avoid Spontaneous Purchases
In order to save money in a short period of time, you should try to avoid emotional and spontaneous purchases.
When going to the store, make a list of what you want to buy. Follow it strictly, do not take unnecessary things.
Before you put items you can easily afford in the shopping cart, think for a couple of seconds. Do you really need it? Little things like this are a drain on the budget.
Don’t go shopping when you’re hungry, because there’s a chance you’ll end up with a lot of stuff you don’t understand.
Try to eat at home and spend less in cafes. As a rule, it’s more economical to take food with you to work than to eat lunch in a canteen. And it’s often tastier and healthier.
Find an Extra Source of Income
In order to accumulate money quickly, it’s worth not only saving but also looking for sources of additional income. The easiest thing to do is to go through the old stuff and sell what you haven’t used for a long time. Or you can try earning from a hobby: you bake well – sell cakes on Sunday markets, you can draw – put pictures in stockades, knit – make a store in social networks.
The likelihood that you have a skill that can be monetized is high. Think back to what you were into before. And if there is no lucrative business in your past, it’s a great reason to think about what hobby you could and would like to have and how to make money on it.
Be Patient
If you use all of the above tips, saving money from scratch will be much easier. The main thing is a system: save and keep track of your expenses, gradually approaching your goals. In this case, time works for you, and all that remains is to learn to wait. When you make your first big purchase with savings, it will motivate you and help you develop this useful financial habit further.