One of the fundamental reasons why people try to save is because we can’t predict the future. Being able to save can help one become financially secure. It helps achieve a safety net in times of emergency. But while having well-established savings is beneficial in several different ways, saving money is often easier said than done. It is especially challenging when your income is just enough to make ends meet. So what do you do? Cut back a little on some of your expenses.
Saving money always involves developing a savings plan and part of it is learning how to spend less money. Read on for some useful tips on cutting back on your expenses and increasing savings.
Avoid impulsive spending
One of the reasons why people end up exceeding their monthly budget is because of spur-of-the-moment purchases. If you’ve always spent a lot of time strolling around the mall and doing window shopping, or fumbling through your phone and checking online shops, now’s the time to curb this habit. These activities can be dangerous if you’re trying to spend less money.
Stay away from temptations to avoid buying things on impulse. As much as possible, stick to buying only the things that are important, the ones you consider as necessities.
Sleep on it
Let’s say you’ve found something you really like in an online shop or a store in the mall but it’s not a necessity or the price is making you think twice. The best thing to do? Sleep on it first before making the final decision to purchase the item. Sleep on it for a night so that you still have plenty of time to contemplate before making the final decision. Who knows, you might not find the item as attractive the next day!
Use cash on purchases and payments
Another reason why spending more than we should is becoming a habit is that we rely on our credit cards or debit cards. According to statistics, people tend to spend 30% less when using cold, hard cash. So if you have credit cards, it’s generally a better idea to leave them at home when you go eat out with friends or keep them out of reach when you do online shopping. Save your credit card for more important and bigger purchases.
Contemplate what the purchase costs in work time
Tempted to buy something on impulse? Try to think about the number of hours you need to spend working to earn the amount of money you’ll be spending on that particular item. Is it worth it? Or do you think this purchase can wait?
Plan your meals
Food can be one thing that eats up a huge chunk of your monthly budget. And that’s okay. However, while we don’t want to skimp on good and healthy meals, it doesn’t mean that grocery shopping should be done on impulse. This is where proper meal planning comes in.
Before taking your next trip to the grocery store, plan out your meals for the next 5 days or so. Then, make a list of the food items you’ll need. Stick to your list once inside the store. Schedule your trip to the store and make sure you don’t go grocery shopping when you’re hungry!
Consider your credit card as a debit card
Your credit card is not an extension of your wallet. The money that’s in there isn’t yours but the bank’s. Think of it as a debit card. This way, you won’t find yourself hastily reaching for the card each time you’re about to make a purchase.
Cut down on your entertainment and lifestyle habits
How much do you usually spend on your cable services at home? Do you have frequent dinner and movie dates with friends? Do you go out to party every weekend? Maybe it’s time that you curb your expenses in these areas if you’re trying to save up and spend less money.
Instead of the fancy dinner, perhaps you can organize a night in with your friends and family. Or do your movie marathons at home. Or downgrade your cable service if you don’t really use all those channels.
The most important trick to start saving is… to actually start saving. Even if you’re setting aside only $5.00 per week, by the end of a year you’ll have more than $250 put away! Obviously you’ll grow your savings faster if you can put more away but any little bit is a step in the right direction.
Building your savings doesn’t happen overnight. It could be a lengthy process but it all starts with learning how to spend less money and eliminating unnecessary expenses. If you’re ready to take the first step toward your financial goals and start your savings, Calcite Credit Union would be the perfect place to start. Please feel free to give us a call for more information.