Advertising
Advertising

4 Quick Steps to Save Money Effectively

4 Quick Steps to Save Money Effectively

Do you want to know “the secret to saving money” that could make you become rich?

Money won’t save itself if you keep telling yourself to start saving it tomorrow. Let’s begin today!

Create a forced saving environment

There are probably a variety of reasons why you haven’t been able to save money. Have you been blaming this on your lack of perseverance or endurance? If that is so, your way of thinking is incorrect. Saving money should not just stay at the emotional level. Forcing yourself to create a money-saving environment is important. When you decide to go on a diet, you won’t lose any pounds by just thinking about it. You have to decide on your daily intake, and eat only what you should eat instead of any kind of food; eventually, you will lose weight. The same idea applies to saving up money:

STEP 1: Write down all monthly income and expenses.

Write down the current household income. At the same time, write down in detail all your expenses.

Advertising

STEP 2: Determine the amount of money you want to save.

Next, write down the amount of money you want to save per month. Remember, it’s not the amount of money you can save, but the amount that you would like to save monthly in order to reach your future goal. In other words, you should calculate backwards from your future savings goal instead of writing something like saving twice the amount of your income. For example, if you want to buy a US$10,000 car 2 years later, you will have to calculate how much you need to save monthly counting from today onwards.

STEP 3: Divide your expenses into 4 categories and determine their upper limits.

Then, divide your expenses into 4 categories and decide the necessary amount for each of them:

1. Cost of living (include rent, food and utilities)

2. Social costs (tuition, transportation, insurance,  ceremonial occasions)

Advertising

3. Entertainment (such as clothes, travel and eating out)

4. Amount of money you want to save

Deduct the amount you want to save from your income, and allocate the remaining amount to the other 3 categories. For example, if your monthly income is US$2,500 and you want to save US$420 per month, the amount will be allocated like this:

1. US$1380

Advertising

2. US$500

3. US$200

4. US$420

STEP4: Transfer the determined amount every month to separated accounts

Till this step, all you have to do is to transfer the determined amounts to the 4 accounts each month when you get paid, and just remember to limit your living expenses to the determined amounts. Of course it would be ideal to live off of the same amount of money every month. However, utility bills will fluctuate and events or family occasions will change your monthly expenses. Therefore, the trick is to review your possible monthly expenses each month when you are paid, and adjust them accordingly.

Advertising

By dividing your living expenses into different accounts in this way, you can easily save money every month without placing a finger on that saved money. This will also help you buy only the things you need and reduce the chance of wasting money. Create 4 bank accounts with the divided income and get started with your money-saving life now!

The information in this article is from the date of publication, June 15, 2013. Please be responsible and take into account safety and usefulness when implementing article contents.

More by this author

Have You Ever Wished Your Kids Will Beg To Do Their Chores? 20 Things People Regret the Most Before They Die Overcoming The Pain Of A Breakup: 3 Suggestions Based On Science Quit Your Job If You Don’t Like It, No Matter What What Highly Successful People Do Every Day To Perform At Their Best

Trending in Money

1 10 Best Ways to Save Money Faster and Smarter 2 8 Best Finance Apps For Effective Budget Tracking And Planning 3 How to Start Investing Without Taking Major Risks 4 13 Books on Money to Transform Your Finance Management 5 How to Set Financial Goals and Actually Meet Them

Read Next

Advertising
Advertising
Advertising

Published on November 11, 2020

10 Best Ways to Save Money Faster and Smarter

10 Best Ways to Save Money Faster and Smarter

People love to talk about budgeting, reducing spending. and investing. But unfortunately, talk is cheap, and poor money management is expensive. It’s easy to talk about the best way to save money, but putting it into practice is a different thing.

What people need to talk about is the practical and efficient ways you can quickly save money to accomplish your goals. After all, they don’t teach this stuff in school.

Here are the 10 best ways to save money faster and smarter.

1. Cancel All Your Subscriptions

Yes, all of them.

Okay, you can keep your wifi and trash. But other than that, cancel all your monthly subscriptions for one month. You will survive, I promise. Better yet, you will realize you won’t miss all of them.

Now that you have had 30 days to examine what you really missed and what you never thought twice about, you can add some of them back in. The others? you never have to think about them again.

This is something you can and should do with every part of your life. If it’s clutter, cancel it. Being able to step back and see what is cluttering your life and what is excelling your forward helps improve your quality of life and financial standing.

Advertising

2. Automate Savings From Your Paycheck

Many of us are so excited about getting a new job that we rush through the paperwork during the hiring process. Good news for you, I have had lots of jobs so I have seen it a million times.

There is an option for a portion of your paycheck to go directly into a secondary savings account. This is by far the most effective way to save money every month. We tend to spend most of what we have. So, if we take it off the top first, then it’s less likely to be spent. Just head over to HR and ask. It will only take two minutes.

3. Cancel the Happy Hours for the Rest of the Pandemic

We are in the middle of a global pandemic, which means that there is no better time to buy some drinks from the local store and stop shelling out $5 a drink at the local cocktail bar. When we look back at our bank statements, we are always shocked that fast food and alcohol can add up so quickly. You can easily save a couple of hundred dollars just by taking this step.

A great exercise is to print out your last bank statement and highlight all the areas of alcohol and fast food. The amount may surprise you and make you think twice about that old fashion.

4. Online Grocery Shopping

Some people think online shopping increases the amount they spend. For the most part, I would agree—except for this category.

Online grocery shopping is now a no-brainer, though. Whenever you walk through a grocery store, two things always happen: you always grab impulse items, and you never know the total of your cart until you checkout. This means that we always spend more than we originally planned.

With online shopping, you can see your total as you add items to your cart. You are way less inclined to make those impulse purchases and because of that, I would venture to say that you could even pay to have them delivered to your door and still save money each month by choosing online grocery shopping.

Advertising

5. Get a Famzoo Debit Card

This is something my wife and I swear by, and it’s great for the entire family! Famzoo strictly exists to help families and kids budget their money better. Each month, my wife and I have an allotted amount loaded onto our pre-paid Famzoo debit card. This amount has changed every year depending on promotions, kids, stage of life, etc.

The important part is that when you give yourself the freedom to spend a certain amount, you are more likely to only spend the allotted amount. Think of it as a diet. If you are counting calories, you are more likely to stick close to the amount you set. You can also look for some tips online to better stick to your family budget.

6. Purge

This is actually my favorite to do, and it is actually one of the best ways to save money. Raise your hand if you have ever moved. Okay, so everyone.

When we move, we are always amazed at how much junk we have acquired. I have found that about every 6 months, I can find a couple of boxes to sell online of things that we never use. This not only gives you so extra quick cash, but it also keeps your house more tidy and organized.

Now, go clean out that garage!

7. Amazon Subscribe and Save

32! That is how many items I have setup on amazon subscribe and save. Let me explain.

This sounds expensive, I know. But it actually saves us hundreds of dollars per year! We all need toothpaste, shampoo, razors, laundry detergent, toilet paper right? This feature is truly a triple threat. When you have more than 5 items on subscribe and save, you automatically unlock the max savings for every product on your list. This can be up to 20% per item!

Advertising

Now, even better is that it ships straight to your door on the exact day you want the item, maybe monthly or maybe you only need it every 4 months. This way, you never have too much or never run out. Either way, it’s totally customizable.

Lastly, there is no contract for any items, which means you can switch brands or items at any given time at no cost. My advice: every single staple item should be on your subscribe and save.

8. Rewards

This may ruffle some feathers, but if you are using your debit card for purchases, you are missing out on free money! We have this notion that credit cards are evil but in reality, they are the same piece of plastic as your debit card.

How you use it can be bad, don’t get me wrong. But if you want my opinion though, ditch the debit card and get a rewards credit card. Use it just like you would your debit card and make sure to pay it off as soon as the statement comes in!

Just to give you an idea of how powerful this can be in terms of money, here are some things that our miles have paid for:

  • 4 nights in Vail with Flight
  • Rental car in Vail (convertible might I add)
  • Flight to Ireland
  • Flight to Hawaii
  • Multiple staycations at very nice Hotels

That’s roughly about 7 thousand dollars in travel expenses so far! Remember that the credit card is just a tool and can be one that benefits you if you use it wisely. Ironically, this can be an effective way to save money.

Pro tip: If you don’t trust yourself carrying around a credit card, then set up all your monthly bills with your credit and leave it in a drawer at home. This way, you rack up miles but don’t get tempted to overspend.

Advertising

9. Vacation With Friends

Now, I know travel is hard right now but what a perfect time to go grab an Airbnb in the woods with a couple of friends and detox from the world right now!

Vacationing alone can be pricey and get rather boring quickly, but if you split lodging and set out for a road trip, it can become affordable quickly! For a couple of hundred bucks apiece, you can have one of the most relaxing vacations ever. Don’t forget to pick up your food at the local grocery store to avoid eating out every meal!

10. Make a Budget

When is the last time you updated your budget or made one for that matter? Making a budget is like writing down your goals. If you don’t make a budget, then you will struggle to save.

How can you know if you are spending wisely if you are not tracking everything?

Our advice would be to get a finance app like Mint, Every dollar, or personal capital. All these apps are free and do a tremendous job of tracking spending and budgeting. I still am old-school and have an excel spreadsheet which I do highly recommend.

Work Smarter, Not Harder

The entire goal is to boost your bank account while reducing the effort required. Efficiency is the name of the game, and automation is the key player. Luckily, we live in a world that has more perks than we can ever take advantage of. But if I were to choose a few, it would be the ones above.

Taking on all 10 of these steps may seem a little daunting. You can first try to pick three of your favorite and start there. Saving money doesn’t have to be a chore as long. As we use the tools correctly, it can be quite effortless. And now, you have a great blueprint to get started!

More Tips on Saving Money

Featured photo credit: Sharon McCutcheon via unsplash.com

Read Next