Tips To Save Money Monthly: Make a Budget When you think of budget, you think about cutting costs and sacrificing your desires. But budgeting is not all about sacrificing; it’s about managing your money so that you can save some to do what you really want to do. It is about breaking down your income and deciding how and where it goes so that your expenditure does not exceed your income. Time Line – You can create a weekly, monthly or annual budget, depending on how often you can do it. The most common budget is the monthly budget, but if you get a weekly pay, you can also make a budget every week. Account For All Your Earnings – Consider all the sources of income and write down how much money comes in from your main source, which is your salary (after deductions), and any additional sources of income like investments or part-time jobs. Income and Expenses – Add up the income on one side of the sheet and write down all your expenses on the other. Divide your expenditure into two main categories – fixed expenses and variable expenses. Fixed expenditure could be regular monthly payments like rent,insurance payments, loan payments etc, while variable expenses could be your food bills, utility and gas bills, expenditure on entertainment etc. Calculate Surplus Income – Subtract the entire expenditure from your income and see how much of the residual income can go into saving. Maintain a Record – Use a spreadsheet to maintain and manage your records, or you can simply use a notebook to record your transactions. Eliminate Your Debt After you make a budget, the next step is to make a plan to get rid of all your debts. From the surplus amount, set aside some money to clear your debts. It is better to save the amount paid on interest by clearing off your debts, instead of saving money for the future while paying huge amounts of interest on your loan. Pay Your Credit Card Bills – Having an outstanding amount on your credit card attracts high interest. To save yourself from the interest, always ensure that you clear off the entire outstanding amount.. Also, avoid using your card too often and do not use the card for things you can’t afford at a given time. Save for Clearing Debt – If you have a large debt, then allocate an amount every month towards its prepayment. By prepaying our loan, you will save a lot of money that goes towards interest. Plan Your Savings Once you calculate the residual amount , after considering all your expenditure and debts, you can start planning for your savings. Setting Goals – The first step is to set specific and realistic goals about how much you will save every month. In case you are saving for anything particular like investing in a property, taking a vacation or an educational course, set a time frame by when you should have saved enough for it. Otherwise, fix an amount you want to save for the future that, after three months, will be sufficient to cover your expenses for at least 3 months. Plan Investments – Plan your investments carefully for long-term goals like your retirement or funds for your child’s college education. Investing your money in a long-term plan like annuities or bonds locks your money for a certain period while allowing it to grow. Keep Track – Make a note of your ATM withdrawals and card usage at retail outlets. Also keep track of your other expenditure and ensure that you do not spend away your savings. Make Your Savings Automatic – A great way of saving money is to make the process automatic. With technological development, banking has become a lot easier now. You can make an online transfer of funds to your savings account, or instruct your bank to transfer a certain amount from your checking account to the savings account on a monthly basis. Save Money On Household Expenditure Managing your household expenses is not an easy task, and if you don’t have a control on them, you could end up in debt. Here are a few tips: Try to get all your services like broadband, telephone and cable from a single provider to get discounts. Get rid of unnecessary facilities like call waiting, or caller ID for your phone to reduce your monthly costs. Always buy energy efficient appliances to cut down the utility costs. Pay your bills on time to avoid penalties. Save Money on Food We spend a considerable amount of money on food, but fail to keep a track of it. Get the best food for less than what you usually spend by choosing your options wisely. Cook your own meals. Nothing can be better than a home-cooked meal and money in your savings account. Drink water instead of soda, juice, coffee or beer to save your money and health. Eat less meat or eat it as a side dish. Instead, use a lot of vegetables, which are comparatively cheaper, to supplement your diet. Try to reduce the number of times you eat outside, and make use of the restaurant coupons you get with your newspaper or circulars. Bring your own lunch and snacks to office instead of buying a meal. Make a list of your monthly requirement of groceries and stick to it. Take advantage of the shop sales and discount offers to save money. Save On Shopping Always try to get the best bargains when shopping. Here are a few things you should keep in mind: Try to find stores where you can get quality stuff for a lesser price. Avoid buying branded products; you can get an unbranded product of the same quality for less. When you buy non-perishable items, buying in bulk often gets you huge discounts. Buy used cars or appliances that are as good as new, for less, instead of buying new ones every time. Shopping on websites like Amazon and eBay that offer discounts on every product you buy is another easy way to save. Save On Entertainment and Travel You can have fun, visit your favorite destinations and save money too. Here are a few tips on how you can save on your entertainment and travel expenses. Get the most of your local library where you can use the internet, get books, movies, audio CDs, games and even free passes to the museum or zoo. Borrow or swap movies, books music etc with your friends instead of buying new ones. To save money, subscribe to magazines instead of buying them from a newsstand. If you enjoy traveling, make plans and book early to get discounts. Consider traveling by train or bus instead of flights. Search on the internet and find cheap hotels that also provide good service. Choose activities like camping that cost you a lot less than a luxury vacation or a cruise. If at any point, a trip you have planned is costing more money than you can afford, postpone it to a later time when you will have enough money. Save On Banking Understanding bank charges and fees will give you an idea of how much you might be paying the bank for keeping your money. Here are some tips on how you can get the best out of your bank account - Be careful of the type of account you open with the bank. Choose a checking account that has no monthly or annual fee and one that does not require a minimum balance. Use your bank’s ATM to avoid charges for using another bank’s ATMs. Avoid using cards that come with an annual fee. Use the bank’s bill pay option to pay your bills instead of mailing your payments. Choose an account that offers higher interest rates.
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