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These 10 Tips Have Helped Me Save Thousands On My Household

These 10 Tips Have Helped Me Save Thousands On My Household

Whether you are living alone, with a roommate or a significant other, managing household costs should be a priority if you want to be able to get out of debt and live a fairly comfortable life. It’s nice to know that you have some money on your account that can help you cover emergency costs, as well as a little extra saved up for a few important luxuries like travel, home renovations and so on. However, in order to achieve a certain level of financial stability you need to make sure that you are being efficient with your monthly budget, and there are plenty of simple ways to save money without making it seem like you are punishing yourself.

What we will be looking at in this article are money-saving tips that are practical and sustainable, i.e. things that will help you out in the long run and that can become second nature. I’ve managed to drastically improve my budget using these tips – by spending less on basic everyday things, I have actually allowed my family to spend more on some of the finer things in life, and so can you.

1. Stop buying disposable razors and expensive shaving gels

Electric shaver

    I’ve always admired my old man’s ability to keep his face clean shaven every single day for decades using an old straight razor that his father left him and shaving soap. I on the other hand, have been wasting money on disposable razors and fancy-looking shaving gels until I realized just how much they were costing me.

    Yeah, they’re cheap, but you can go through a bunch of them each month. Since a straight razor takes time and skill to use and has to be maintained, a better solution for the busy modern man or woman would be a safety razor or an electrical shaver. Modern electric shavers give a good shave in a third of the time it takes to shave with safety or disposable razors, they work for women as well as men, and you only need to replace the head every few months. You can also whip up a very good shaving cream at home with a minimal investment. Switching to an electric shaver and making your own shaving cream will save you 20-30% depending on how often you shave.

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    2. Switch to a healthier diet and do some walking

    Many people are under the wrong impression that eating healthy costs more than eating junk food. For one, a healthy diet means cutting back on the calories to shed some of the extra pounds, and less food means less money spent. Second, as long as you don’t go full on organic, you’ll find that fruit and vegetables can be quite cheap and filling. You can even buy frozen vegetables in bulk and keep them in the freezer for months.

    Eggs are quite cheap as well, and you can get chicken, beef and veal relatively cheap when buying in bulk. As long as you go for a brisk walk, say 60-90 minutes each day, do a few workouts here and there, and eat healthy your health will improve and your medical bills will go down. A healthier lifestyle and smart grocery shopping can save you around 20% and save you a trip to the doctor.

    3. Work on your gardening and cooking skills

    Gardening at home

      If you want to take your healthy lifestyle savings to the next level you can grow your own fruit and veggies in the garden or even inside the house, and cook your own food instead of dinning out all the time. There are plenty of fruits and vegetables that don’t take up a lot of space, they give you free and fresh organic ingredients and some, like cherries and almonds, are extremely beautiful when they flower.

      You have access to thousands of recipes online and free cooking videos, and you can prepare meals for the next few days and keep them in plastic containers, and bring them to work. Growing your own fruit and vegetables, and cooking more can save you an extra 10% on your grocery bills.

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      4. Be on the lookout for great bargains, even if you don’t need anything right now

      Shopping for something only when you absolutely need it doesn’t leave you with a lot of options. For example, buying a big warm jacket during the winter means you’ll have to pay the full price, while you can buy one in the summer for half price. This is why you should always be on the lookout for great deals when you are running errands around town or going to get some coffee on your lunch break.

      Sometimes an exceptional opportunity presents itself, and the money you spend now saves you a lot more down the road. Depending on the discount or special offer involved, hunting for good deals can save you anywhere between 15% and 50% on a variety of items.

      5. Educate yourself about hygiene products, clothes and gadgets, so you can buy cost-effective items

      Informed customers

        To boost your savings even further you need to become a well-informed consumer. A higher price doesn’t necessarily mean better quality, and sometimes all you are paying for beyond a certain point is the privilege to become a walking billboard for a big company. With hygiene products like shampoos, tooth pastes and soaps in particular, there is no noticeable difference between reasonably priced and top of the line products, apart from packaging and marketing.

        The more you know about phones, cameras, fashion and other areas, the better you will be able to judge whether a product is worth the price tag or not. By being an informed shopper, on top of looking for bargains, you can save another 5-15% while getting the same quality goods.

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        6. Try to ditch some of those bad habits

        About 18% of American adults are smokers and over a third are obese, and the numbers aren’t quite clear on the number of people who drink regularly. Bad habits like smoking, emotional eating, excessive drinking, impulsive shopping and even excessive coffee consumption can take a big bite out of your budget. It takes a strong will and patience to make a positive lifestyle change, but it really pays off. Not only can ditching bad habits do wonders for your overall mental and physical health, which means spending less on medical bills, but it can help you cut your spending by another 10-30%.

        7. Consider switching to a wood-burning stove

        classic wood burning stove

          The heating bill is usually one of the biggest hit to everyone’s budget. When winter comes you don’t have much of a choice than to keep the house warm by any means available. However, even though some DIY insulation solutions can help you keep the place warmer, a wood-burning stove is a very cheap heating solutions and will last for decadences. Getting quality firewood will keep the fire going for a long time and isn’t expensive, but will require some work to chop up and store properly. A stove will require an initial investment, but will quickly pay for itself, as it keeps you warm winter after winter, and will save you up to 20% on your heating bill.

          8. Don’t walk around the house in a t-shirt and shorts during the winter

          You can save on your heating during the coldest months even further if you dress for the season. Most people like to feel warm and cozy, but if you want to walk around the home wearing as little clothes as possible, like you do in the summer, then you will need to heat the home up to summertime temperatures, which is not very energy efficient. A simple solution is to wear warm socks and slippers, and layered clothing, so that you can keep the temperature a bit lower and still stay warm enough. This can cut another 3-5% from your bills.

          9. Learn to limit your water usage during everyday tasks like showers and dish washing

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          Conserving water while washing dishes

            I like to imagine that I am in a dessert environment and that water is very precious and the supply limited – an idea I got from a summer vacation where we had to make do a set amount of water each week. You’d be surprised at how much you’ll save on your water bill if you start turning it off while you brush your teeth or soap up during a shower, use a low flow to quickly rinse the dishes and turning it off until you’ve applied detergent and scrubbed them off and so on. You can also get more efficient shower heads and faucets. This can save you a nice 5-8% on your bills, depending how many people you have in your household.

            10. Hit the library

            Buying books can be expensive, while joining a library costs very little. However, not a lot of people spend plenty of money on books, but they do sometimes need a quiet place to work or do some research, and while coffee shops are a good option, they tend to be pricey. Public libraries offer a calm workspace which doesn’t cost you anything, and as an added bonus, those few hours you spend at the library are a few hours during which you are not actively using electricity at home, so you save a tiny bit on your energy bill as well. Depending on how much time you spend at the library, you can save some 5-10% on coffee shop bills.

            All in all, following these simple and effective cost-cutting measures will allow you to shave a fifth or fourth off your monthly spending. This money can go towards paying off your debt, straight into an emergency fund or into a savings account.

            Featured photo credit: Kitchen via shutterstock.com

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            Ivan Dimitrijevic

            Ivan is the CEO and founder of a digital marketing company. He has years of experiences in team management, entrepreneurship and productivity.

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            Last Updated on September 2, 2020

            How to Set Financial Goals and Actually Meet Them

            How to Set Financial Goals and Actually Meet Them

            Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

            In this article, we will explore ways to set financial goals and actually meet them with ease.

            4 Steps to Setting Financial Goals

            Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

            1. Be Clear About the Objectives

            Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

            It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

            Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

            2. Keep Goals Realistic

            It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

            It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

            3. Account for Inflation

            Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

            Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

            For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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            4. Short Term Vs Long Term

            Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

            As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

            By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

            How to Achieve Your Financial Goals

            Whenever we talk about chasing any financial goal, it is usually a two-step process:

            • Ensuring healthy savings
            • Making smart investments

            You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

            Ensuring Healthy Savings

            Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

            This is the focal point from where you start your journey of achieving financial goals.

            1. Track Expenses

            The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

            Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

            If you’re not sure where to start when tracking expenses, this article may be able to help.

            2. Pay Yourself First

            Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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            Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

            The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

            Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

            3. Make a Plan and Vow to Stick With It

            Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

            Nowadays, several money management apps can help you do this automatically.

            At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

            Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

            You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

            4. Make Savings a Habit and Not a Goal

            In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

            Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

            • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
            • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
            • If you go shopping, always look out for coupons and see where can you get the best deal.

            The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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            5. Talk About It

            Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

            Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

            6. Maintain a Journal

            For some people, writing helps a great deal in making sure that they achieve what they plan.

            If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

            When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

            Making Smart Investments

            Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

            1. Consult a Financial Advisor

            Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

            Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

            2. Choose Your Investment Instrument Wisely

            Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

            Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

            As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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            3. Compounding Is the Eighth Wonder

            Einstein once remarked about compounding:

            “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

            Use compound interest when setting financial goals

              Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

              Start saving early so that time is on your side to help you bear the fruits of compounding.

              4. Measure, Measure, Measure

              All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

              If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

              Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

              The Bottom Line

              Managing your extra money to achieve your short and long-term financial goals

              and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

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              Featured photo credit: Micheile Henderson via unsplash.com

              Reference

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