Thursday, 18 June 2020

5 Practical Ways To Save Money

Practical Ways To Save Money

We have talked about setting financial goals, so if you took the time to set some goals for yourself you may have realized okay if I want to hit these goals, I am going to need some more money in order to do that, so how am I supposed to hit my goals? I don't have enough money?. That is what we are covering in this article. We will be talking about 5 practical ways you can save money really fast, I think that these are super practical things that you can start right away and you can use the extra money generated to invest in yourself, to invest in the goals that you set for yourself.

let's jump into it.

1. Start Generating Side Income 

When I was trying to pay off debt and build an emergency fund this was absolutely the key that helped me do that. There are so many ways that you can have a side hustle to make extra income, we have a whole separate article about that

Read: 10 Side Hustle Ideas For 2020 That You Can Start Today
5 Online Jobs To Make Extra Money At Home

Those are all things that I have done personally and they have worked really well for me but some other things that I have not tried would be using Airbnb to rent out a place in your house, you could use the app called Toro to rent out your vehicle, you could do some freelance work, those are things that I actually have never earned money from, but I know that they work and they exist because I have used them, I have paid to use Airbnb many times, I have used the Turo app before, I have paid for freelance work all sorts of different freelance work, so there is definitely a market for this. You do not need massive skills to start freelancing no matter what your skill level is, there are different tasks that you could look into doing. Read about those articles of a side hustle to learn more.

2. Start Shopping Used 

I understand you cannot buy everything secondhand but it is my habit to always check for a secondhand version first. If I need a new cellphone or a new camera I am always going to look for a secondhand version first, this goes for clothing, if I need sporting equipment, I mean, I buy so many things used, and sometimes, of course, there are items that I just cannot find secondhand especially since I moved to Switzerland the second-hand market here is not nearly as big as in the United States, but if you start buying used, you are going to be surprised at how much money that you save.

When you buy used, you are limiting how much depreciation can take place on your items. If you buy a car that is brand new, drive it for two years and sell it you are going to have a really big loss from the depreciation of the car, whereas, if you buy a second-hand car and drive it for two years, there's probably still a small depreciation maybe not, I have sold cars driven them for two years and sold them for almost exactly what I have purchased them for, because I maintain them, but even if it does go down in value it is not going to be as much as the person who bought it from brand-new to use. So that's something to think about while you shop.

3. Paying With Cash 

There have been lots of studies that prove when you pay with cash you spend less. There is what you call friction when you are paying with cash, it is painful to take out your wallet, see your hard-earned money and hand it over, and you want to avoid that pain so you are spending less. This will definitely happen I know this is a fact for me I can control my spending so much more paying with cash and I really think that this is a very very healthy habit, and they are always going to be people that tell you, you need the points, you need to build your credit score, and things like this, but I would rather have cash in my pocket than points on a credit card. I understand that there may be situations where that makes sense, but for me personally, I do not believe that credit card points or things like that are what's going to get me ahead in life, so I just choose not to focus on it, and I choose to save and just keep that cash in my bank account so I can invest it in my future and my dreams, and hitting my goals.

4.  Lower Your Overhead Expenses

Overhead all expenses that you need. You have your rent, you have your transportation, you have your cellphone, those things can be changed, a lot of people think that those are fixed cost that cannot be changed, but I want to encourage you to question everything, question how you can lower your overhead, perhaps, you can downgrade your cellphone plan, you can eliminate some expenses, you can lower your rent, you can somehow lower your transportation costs, you know, we personally don't have a vehicle and we don't even have a bus pass, we just bike and that allows us to save hundreds every single month. That's just a lifestyle change that allows us to save instantly. Definitely look into those ways that you can lower your overhead, I know this is a big challenge especially if you have kids or you are not as flexible as some people might be, but definitely just have a look, and see if there are things that you can downgrade.

5. Eliminating Recurring Bills

Once you move out of your parent's house and you are on your own you are going to have a lot of bills, a lot of the part of growing up is having expenses that you have to pay every single month, but this does not need to be super complicated and you can probably eliminate some of the bills that you have every month right now. For example, I have five things that I need to pay for every single month; 

Life insurance 
Cell phone
Health insurance 

Those are the only bills that I have, my life is very simple, I have cut everything that I don't deem essential so what you don't see on here is Netflix, Amazon Prime, and all sorts of those $10 a month fees. This is such a popular business model, it seems like every company nowadays wants to $10 a month you to death, and those recurring bills can add up and it can increase your overhead. Try to see what you can eliminate because it does not have to be complicated, people tend to tell you always as getting older your life is going to get complicated and there are so many expenses that you cannot avoid. Keep it very simple, it does not have to be complicated at all. Look at your recurring charges and see if there are things you can eliminate 

All right, I hope you learned a practical way that you can start saving more money 

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