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The Smart Ways to Save Money Fast (Even If You’re a Big Spender)

The Smart Ways to Save Money Fast (Even If You’re a Big Spender)

Are you under the constant impression that you are barely making ends meet? It is almost impossible to treat yourself with something expensive, as you seem to have just enough money to get by through the month.[1]

Also, you have no major expenses on a daily basis, you pay the bills, you eat out maybe once or twice, and then you get your monthly subscriptions and maybe one or two new items. Yet, you still end up wondering where all your money went.

Furthermore, it has definitely occurred to you that you might need to get credit at some point, either for a new car or for an apartment, and that requires a positive credit history. All of these are valid and troublesome concerns, especially if you don’t have at least $1000 in your savings account.

So, here, we will go over how to increase your savings and become more prudent, as well as why saving money is tricky but necessary.

I got it, we save money today to prepare for a better future.

We are all fully aware of the reasons why it is important to save money. For starters, it is the first and most important step towards financial independence.

The second reason is that we need savings in the event things go south for some reason, or if we need money to buy or repair a piece of equipment that is necessary for our work or of us to earn money.

Lastly, you need to know how to properly manage your finances in order to have a positive credit score, which will make it easier for you to get a loan if you ever need one, and you will also have lower interest rates when returning that money.

But saving money always seems to be so difficult…

One of the main reasons why saving has become more difficult is due to micro transactions and monthly subscriptions.

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If you want to save money, you need to give up a magnitude of smaller things rather than one or two of them. In other words, any attempt to save money by cancelling one subscription for example seems meaningless, since you aren’t saving a lot to begin with.

Another reason why we struggle with saving cash is because of our daily habits. We have developed certain tastes, and certain rituals that we tend to indulge on a daily basis, so very often, saving money warrants a fundamental change and people are not really fond of them in general.

Moreover, if you have a lot of bills that require immediate attention, it is difficult to think about saving money, when there are clearly more pressing matters.

So, spending money provides us with short-term positive feelings that we have kind of grown addicted to, whereas saving money does not. So, we are in a way stuck in this hedonistic treadmill,[2] and we just continue to live on paycheck to paycheck.

What can I do to start saving money?

Now let us go over some of the techniques, habits, and tricks on how to start saving money on a monthly basis. If you somehow manage to adhere to all of these tips, you can look forward to a significant amount of cash. However, we are all aware just how difficult it can be to drastically change your life, so you can also introduce these new methods one at a time.

1. Say no to extended warranties.

Whenever we buy something we want to make sure that the item is high quality and that it will serve us for months or years to come. As a result, we are very often tempted to buy extended warranty, which is, in a way, a waste of cash.

First of all, if you are not particularly clumsy and if you do not cash in on your extended warranty, then there is no need to get one in the first place.

Second, we hate using the same thing for more than a year, so it is very likely that you will buy a new item or gadget even if the old one is still working.

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2. Buy refurbished gadgets.

Here is a really good way to save a significant amount of money and get good products at the same time. We usually pay more for something just because it has a strong and well-known brand name behind it.

There is no reason to think of that as a bad choice; after all, a renowned brand means greater security, but it also means that it has good products in general.

In other words, buying branded refurbished gadgets can help you get amazing and useful tech without spending a fortune on it.

The downside of it is that you will not be up to date with the latest product, but eventually, they will be available as a refurbished phone or tablet, or any other gadget.

It is a good way to test yourself if you are buying out of peer pressure and to stay relevant, or if you are buying because you are acting on impulse.

3. Make it a weekly challenge.

A very useful trick for saving extra cash on a monthly basis is the so called weekly challenge. Much like with any game there are the easy, normal and hard mode, and this is how it is done. Basically, you set a weekly sum for yourself that you need to put aside at the end of the week.

You can go with $1, $5, or $10. The key is to double the amount at the end of the next week and so on until the end of the month. So with $5, you have $5 at the end of first week, $10 at the end of second one, $20 at the end of third and $40 at the end of the month.

This is why it is way more difficult to pull it off with $10 as your starting sum. It is a really good way of saving money, and you need to invest it with the rest of your savings into your savings account, in order to accumulate a more significant savings stash.

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4. Train yourself to be more patient.

Patience is a virtue and for a good reason.[3] When it comes to saving money, you can save a lot if you are patient.

First of all, it gives you more time to research and discover better items at a more available price.

Second, you can wait until there is a sales incentive or discount at the store before you buy something expensive.

Third, many stores offer discounts if you purchase multiple products, so it is better to save money and then purchase in bulk because you are going to save more this way.

5. Save your spendings on transport.

We tend to spend a lot of cash on transport, whether we’re buying gas, or even worse, if we use a cab to get by.

If you make a deal with friends from work to car pool, you can reduce the carbon footprint by relying on one vehicle, and you can save money on gas.

If you spend too much money on taxis, then you should immediately switch to public transport. This is far more convenient and cheaper, plus when the traffic is busy, you will actually get to where you need to be more quickly.

Simply get a monthly pass, or store value on your metrocard to save more money and start walking a bit; it will do you good. Alternatively, you can buy a bicycle and use it to commute; it is also convenient, cheaper, and great for your health.

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6. Cancel unnecessary subscription.

As mentioned, a great portion of our funds is funnelled away due to our monthly subscriptions that we do not even fully use. So, limit yourself to a single subscription that you are going to like the most during one particular month.

Private networks like hulu or Netflix usually announce what their users can expect in the upcoming month, so you can check that content in advance and decide which network you are going to use for that month.

7. Don’t pay for brand names.

We tend to pay a lot for big names and influential brands, and these products are usually overpriced for no reason. Sure, you might want a particular phone or PC to have strong components and, since it is a long term investment, you do not mind spending a bit extra.

However, when it comes to chargers, HDMI cables, headphones, or adapters, you can find decent products at a lower price that are going to get the job done. So, when you are buying something, it does not need to be from an expensive producer at all costs, and you can save a lot if you opt for less known, yet still competent providers.

8. Avoid eating out.

One way of committing financial suicide is by eating out frequently. Sure, we love the service, and that food is instantly prepared, but as mentioned, it is important that we practice patience in order for this to succeed.

It is far cheaper and healthier to prepare your own meals, plus you get to learn how to cook.[4]Today, we have pages and video clips that help us prepare meals, so there is really a small chance that you can mess it up, considering the amount of instructions you can get.

9. Consider energy saving appliances.

Finally, the money you save can be invested into energy conserving appliances and this helps you reduce the amount of money you pay for the bills. You can get energy saving light bulbs, as well as other appliances that spend less electricity, and you can even buy solar panels at one point.

Moreover, you can check your electricity provider to see how much they charge and switch to another one in your area that charges less.

Well these were the tips that can help you save money; you should also make sure to look up how to earn extra money online, just so that you create an even bigger savings account.

Some of these don’t require too much effort, others may include learning new skills, but mostly, it’s about practicing patience and restraint. Hopefully, you will find this article insightful and inspiring, and it will help you save some money.

Reference

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Nemanja Manojlovic

Editor at MyCity Web

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Last Updated on July 10, 2020

The Definitive Guide to Get out of Debt Fast (and Forever)

The Definitive Guide to Get out of Debt Fast (and Forever)

Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

Identifying All of Your Debts

The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

Here’s how you can get started identifying your debts:

1. Own Your Debt

Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

2. Make a Debt Tracker

It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

3. Get Your Debt Number

Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

Prioritizing Your Debts

All debt is not created equal. It’s imperative to understand that there are different types of debt.

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1. Understand Bad and Good Debts

Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

There are three main types of bad debt:

  • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
  • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
  • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

Good debt is identified as investments in your future. Here are three common types of good debt:

  • Student Loan Debt
  • Mortgage Loan
  • Business Loans

2. Decide Which Debt to Pay off First

Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

3. Don’t Pay the Minimum Amount

Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

Removing Obstacles to Pay off Debt Quickly

Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

1. Set a Reminder to Track Your Debt

“If you can’t measure it you can’t manage it.” -Peter Drucker

It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

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Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

Set weekly and monthly goals so you can have short term wins and keep the momentum going.

2. Hide Your Credit Cards

If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

3. Automate Everything

Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

4. Plan Ahead

Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

5. Live Cheaply

The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

  • Live with roommates
  • Cook dinners and prepare lunches for work instead of eating out
  • Cut cable and choose Netflix or Amazon Prime
  • Take public transit or bike to work

Finding the Lowest Interest Rates

The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

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1. Maintain a High Credit Score

Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

  • Never miss a payment
  • Don’t exceed 30% of your credit limit
  • Don’t sign up for more than one card at once
  • Limit hard inquires, like auto-loans and new credit cards
  • Monitor frequently with free credit-tracking software

2. Find Balance Transfer Offers

Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

How to Get Rid of Debt Forever

Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

1. Keep Monitoring and Adjusting

Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

2. Earn More Money

There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

Here are some examples of ways to earn more money:

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Talk to Your Boss

Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

Start a Side Hustle

This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

Build an Online Business

There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

3. Celebrate Your Wins

As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

4. Set New Financial Goals

Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

Conclusion

Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

More Tips on Getting out of Debt

Featured photo credit: Pepi Stojanovski via unsplash.com

Reference

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