Wednesday, 13 November 2019

How To Save Money (6 Easiest Way)

Budgeting

We're going to be taking a look at 6 different strategies that you can implement in order to save some money. Everybody wants to have some more discretionary income and that's the point of this article. We can have more money to spend on the things that we want in life instead of ending up in credit card debt and being swamped with bills. Hopefully, this article is helpful.


1. Limit Credit Card Use (Last Resort)

I want to clear this up here because this can sound a little bit weird at first. Because credit cards are very important to build your credit score. I have a lot of credit cards, I use them and they're really effective in order to build my credit score and I get credit rewards on that. But as Dave Ramsey says many times, credit cards, you're going to end up spending a little more money.

Read: How To Manage Your Money - 50 20 30 Budget Rule

Maybe it's only a couple percent more, but you generally will spend more and that is because you don't have this sort of physical attachment to it, because you're swiping a piece of plastic or you're putting in the chip reader, but you don't actually lose anything, nothing leaves your hands.

What if you're buying stuff in cash, you're handing over that cash and it can be painful if you're handing over $100 bills versus just swiping a piece of plastic. Hopefully, you can see how that could psychologically affect you a little bit. 

If you're falling into that trap of spending too much money, you find yourself in credit card debt, maybe consider putting those credit cards in your desk drawer, only using them once or twice a month just to keep your credit score going.

Leave those credit cards at home, don't use them as much if you fall into that category where you're racking up credit card debt and it's starting to get out of control and you really do need to start saving money. That's a possibility for you


2. Set Specific Goals 

You don't want to set a goal of saving money. You want to set time-specific goals with monetary value. Let say, in the next 4 weeks, I want to save $1,000, or in 2020, I want to save $20,000. You set these goals, and then you'll be more motivated to hit those goals.

You can write it down, even put it up on your wall if you need to put a sticky note on your wall or on your computer in order to help yourself to save this money, just to keep it in your head. Written down specific goals will help you in the future.


3. Automatic Bank Transfers

There is something else you can do and it's very simple, it only takes about 5 minutes to set up and this is by setting up an automatic transfer from your checking account to your savings account. Or from your checking account to your brokerage account or your retirement account.

This is very easy to do, you can find this on your banking website in the next 5 minutes. Let's say you get paid $2,000 a month, on the day that you get paid, you can set up automatic transfers, when $2,000 comes into your bank account, $500 of it automatically gets transferred to your savings account. 

Then you live off of that $1,500 and almost pretend or trick yourself into thinking that you're only making $1,500 every month instead of $2,000. It's a cool little method that does work and I've seen people use it and it really does help them and save some money.


4. Create A Monthly Budget

This sounds so simple but it's really important. There's a reason why companies, businesses, will have a financial statement. So they have income statements, cash flow statements, they have balance sheets and there's a reason for. It's because they use these so that they can be more profitable, they can see the weaknesses, they can see where they're excelling and they can see where they can prepare and excel in the future.

You can do this yourself, I'm not saying run yourself like a business, but if you calculate all of your assets, your liabilities, you know where your money is coming in, where it's going out. It's really going to be effective in saving money, you can automatically save a couple hundred dollars per month and just by laying out a monthly budget.


5. Use The 24 Hour Rule

I'm not sure where this came from but it's straightforward. If you make spontaneous purchases on the internet like I do, where you're scrolling through Amazon and you get hit with one of those ads on Instagram and they look really cool, you can buy $250 shoes and then all of a sudden, the next thing you know you end up with shoes at your door a couple days later, because you ordered something online. Very spontaneously.

The 24-hour rule is very simple, you just sleep on it, think about it for 24-hours and then make your purchase, it sounds so simple. But it can save you a lot of money. Don't just buy things spontaneously, make sure you think about them for a longer period of time and you're going to find yourself just saving more money.


6. Price Matching

I don't really see people doing it often, and this is by price matching stores against each other. I'm not talking about price matching a cup of soup from Walmart to other stores, you don't have to cheap out that much. But we're talking about price matching larger ticket items.

If I go to BestBuy, something that I usually do before I buy something is I'll look it up online and find some cheaper prices and I'll go to Bestbuy and say hey, Walmart selling it for $40 cheaper, you can just give me $40 off, and they say yeah sure.

It's good to price match stores against each other and you can do this not only for stores like Bestbuy and Walmart and others. But you can do it for places like if you're buying a mattress, you can bid competitors against each other.

Anything that's over $1,000, you can find yourself trying to get a better price and you can save a lot of money in the process. Don't be afraid to ask for a better price especially if it's something that's a bit ticket item.

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