Do you need money for investing or starting some business or to become debt-free and live a peaceful life? And you think there is no source to generate this extra money required? Do you realize that you are not able to achieve your financial goals or money doesn't stay with you for long?
What follows is a list of steps to take. Each of these tactics is simple little moves you can make to improve your financial situation. Some of them take just a few minutes, others might take an hour or two, some of them require a bit of regular effort, but they’re all incredibly simple – anyone can do them. Each of them also saves significant money, especially over the long haul, and when combined together these tips can save you a lot of money now.
Obviously, not all of these tips will apply to everyone. Just go through the list and find those that do apply to you and use them in your life. You’ll quickly find yourself saving some serious scratch. Figures given are for example purposes and given in Dollars; you may read them as your currency.
Talk to your loved ones about what your dreams are: It seems like an odd way to save money, but think about it. If you spend time with the people you love the most and come to some consensus about your dreams, it becomes easy for you all to plan for it. If you’re all planning and working together towards this dream, it becomes easier to stay focused on it and reach it. Set a big, audacious goal together and encourage each other to be financially fit – soon, you’ll find you’re doing it naturally and your dreams are coming closer than ever.
Plan your purchases: Has the $100 spent on a dress for fresher’s night left you broke? Simple mathematics and a bit of planning could have helped you avoid the situation. Cutting down your expenses by $25 every month would have saved you $100 in just four months and made the dress affordable. Planning ahead is an easy way to prevent bankruptcy.
Set savings goals: For short-term goals, this is easy. If you want to buy a video game, find out how much it costs; if you want to buy a vehicle, determine how much of a down payment you’ll need. For long-term goals, such as retirement, you’ll need to do a lot more planning (figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working), and you’ll also need to figure out how investments will help you achieve your goals.
Establish a time-frame: Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. If it’s not attainable, you’ll just get discouraged.
Plan: Figure out how much you’ll have to save per week, per month, or per paycheck to attain each of your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. For most savings goals, it’s best to save the same amount each period. For example, if you want to put a $20,000 down payment on a home in 36 months (three years), you’ll need to save about $550 every month. But if your paychecks amount to $1000, it might not be a realistic goal, so adjust your time-frame until you come up with an approachable amount.
Keep a record of your expenses: What you save falls between two activities and their difference is how much you make and how much you spend. Since you have more control over how much you spend, it's wise to take a critical look at your expenses. Write down everything you spend your money on for a couple of weeks or a month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc.
Keep a small notebook with you at all times. Get in the habit of recording every expense and saving the receipts. Sit down once a week with your small notebook and receipts. Record your expenses in a larger notebook or a spreadsheet program.
There are also many applications you can download to your phone that will help you keep track of your expenses. Trim your expenses. Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $30 on ice cream, $10 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with.
Calculate how much those cuts will save you per year, and you'll be much more motivated to pinch pennies. Can you move to a less expensive apartment or house? Can you refinance your mortgage? Can you save money on gas, or give up a car altogether? If your family has multiple cars, can you bring it down to one? Can you get a better price on insurance?
Call around and make sure you are getting the best price you can. Consider taking a higher deductible, too. Shop the discount racks at clothing stores. Items on clearance are marked down considerably and could save you 50% of the price. Can you drop a land line and either only use your cell phone or save money by calling over the internet for free with services such as Skype? Can you live without cable or satellite TV? Can you cut down on your utility bills? Can you restrict eating out? Buy food in bulk? Start using coupons? Cook more at home? You might be able to save a lot of money when grocery shopping.
Reassess your savings goals: Subtract your expenses (the ones you can't live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let's say you've decided you can definitely get by on $1600 per month, and your paychecks amount to $2000 per month. That leaves you with $400 to save. If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the time-frame. Maybe you need to put off buying a new car for another year, or maybe you don’t really need a big-screen TV that badly.
Make a budget: Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things. This is especially important for expenses which tend to fluctuate, or which you know you're going to have a particularly hard time restricting.
Always keep looking ahead: Don’t let the mistakes of your past drag you down into more mistakes. Look ahead to the future. The choices you make now won’t affect the past – but they definitely will affect the future. Think back, and remember how the bad choices you made earlier are costing you now, and constantly remember to not make those mistakes now so that they don’t cost your future self.
Don’t beat yourself up when you make a mistake: Even if you make ten good choices, it’s easy to beat yourself up and feel like a failure over one bad choice. If you make a big mistake and realize it, think about why you realized it now instead of then, and try to apply that later on. The memory of that mistake can end up being very valuable, indeed.
Never give up: Whenever the struggle against debt feels like it’s too much, go read a personal finance blog and remember that there are a lot of people out there fighting the same fight. Read around through the archives and learn some new things – and perhaps get inspired to keep going, no matter what.
Make a monthly budget: This doesn't have to be a complicated number-crunching exercise. A simple Excel sheet or the planner in your mobile will suffice. The idea is to keep track of your monthly expenses and plug any unnecessary spending. Start by listing your fixed expenditure like transportation cost, food, etc, and keep aside money for these. The balance can then be used for discretionary expenses like shopping, gifting or partying.
Kill your debt first: Simply calculating how much you spend each month on your debts will illustrate that eliminating debt is the fastest way to free up money. Once the money is freed from debt payment, it can easily be re-purposed to savings. Plus, the sooner you pay off debt, the less interest you'll pay, and that money can be saved instead. If you choose to start saving before you completely pay off your debt, however, look into consolidating your debts so that you're not paying as much interest. The only money-saving that should take precedence over getting out of debt is to create an emergency fund (setting aside enough money so that if you lose your income, you can survive for 3-6 months). If you don't already have an emergency fund, you should start contributing to one immediately.
Pay yourself first