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How to Save Money
Let’s face it, saving money can be challenging, no matter how hard you try. Even if you set out to spend less and start saving some cash from week to week, things will inevitably come up and disrupt your efforts. In many cases, emergencies or other unexpected financial matters may compel you to spend even more money than you have, and really set your saving efforts back. Disappointments and short-term failures when you’re trying to get your financial house in order can make saving money seem absolutely impossible.
It doesn’t have to be that way, however. If you truly set your mind to it, you can start saving money and meeting key financial goals, even if you have an emergency from time to time. Here is what you need to know about how to start saving money today.
When Should You Start Saving Money? Right Now!
One thing you should know is that there is no such thing as a perfect time to start saving. Even if there is a particularly good time for you to spend less, experts advise that you prepare to save at all times; that today is as good a day as any to put your money saving plan into action. In fact, waiting to some later date to save money, even if well intentioned, may set you up for failure. That magical moment you imagine may never come true, and it will be too easy to delay the day when you should start bucking down to get your savings started. Additionally, life can be unpredictable, so rather than marking a day on your calendar, it is better to just make a quick plan and start saving immediately.
The Significance Of Saving Money
Why should you save money, anyway? After all, if you have solid cash flow coming in week after week, is saving money really that important? The answer to that question is yes, it is important! Here are some good reasons why you should start saving money as soon as you can:
- You May Need to Make an Important Purchase in the Future
Sooner or later, you may need to make a major life purchase such as a new home or a car. In order to make the big purchase, you will need at least some of the cash on hand.
● You Must Prepare for the Unexpected
Saving money ensures that you can easily navigate difficult situations, such as a health emergency or unexpected vehicle problem. During such times, your savings can provide you financial security and peace of mind.
- To Have a Better Future
If you can start saving money, it can set you up for a better future. Saving money will allow you to do things such as accumulate wealth to invest. It will also allow you to prepare for retirement when you likely won’t be able to rely on cash flow from working.
Practical Money-Saving Recommendations
So, now that you know saving money is really important, how do you actually do it? Here are some great tips that will help your bank account start growing in no time.
1. Determine How Much You Earn and How Much You Spend
It is critical to know how much money is coming in and going out of your account in order to implement a working savings plan for yourself. Experts advise that the first step you should take when starting to save money is to record your expenditures as well as your income for a specific time period. By doing so, you will be able to see where the money that you have worked so hard to obtain ends up. Fortunately, there are a plethora of financial apps that make it easier than ever to track your finances with little to no effort, so try to download and start using one today.
2. Set Solid but Attainable Savings Goals
In general, how much you can save is determined by how well you set your savings goals. Having concrete goals improves the amount of money you set aside for savings. Saving goal-setting entails identifying a specific amount of money to aside for the future. This stacked-away sum can be a percentage of your monthly income, which includes everything earned during that time period. It could also be a percentage of your formal income only, excluding any other passive income earned during the period. Whatever you choose, make sure it is realistic and does not stress you out. Many accounting mobile apps and web-based platforms allow you to set savings goals, and you should start with one.
3. Use the 50-30-20 Rule to Save Money Automatically
If you’re looking for a place to start with your budget, consider the 50-30-20 rule. This popular budgeting technique requires you to set aside 50% of your income for necessities like food and rent, 30% for wants like vacations, and 20% for savings. Although financial experts expect the rule to be followed, it is recommended that it be reworked to your own personal lifestyle and requirements to avoid slipping. It is also advised that the percentage set aside for savings be automatically deposited into a savings account to avoid spending from it. Most banks have a feature that allows their clients’ funds to be transferred directly from their main account to a savings account at the start of each new set period.
4. Get Out of Debt
Having to make regular debt payments deprives you of money that could have been saved. As a result, debt has become a significant impediment to saving. If you want to have financial security, you must pay off all debts, regardless of the amount. Paying off your debt will free up income each month that you can start allocating towards your saving goals.
5. Obtain Lower Interest Rates at all Times
High-interest loans should be avoided to the greatest extent possible because they increase the periodic payments made to creditors. With an increase in bills, the amount of money available for spending will undoubtedly decrease. Experts advise that if you need to take out loans, you should contact creditors and request a reduction in the interest rates charged for their services, or possibly a waiver. In the worst-case scenario, you will be rejected, but you should definitely give it a shot. The lower the interest you pay on your debts, the more money you’ll be able to save each month.
6. Cancel Any Auto-Subscriptions or Memberships
Automatic subscriptions to service rendering platforms such as Amazon Prime, Netflix, Spotify, and Hulu can wind up eating a large portion of your budget. If these subscriptions are numerous, regardless of how generous their discounts are, your substantial income will undoubtedly be impacted. To increase the overall money you have available to save each month, cancel subscriptions, share them with friends and family, or turn off auto-renewal. With the automatic renewal turned off, subscriptions that do not fit your new and improved budget will not be presented as expenditures. Furthermore, by extending subscriptions to family members or friends with an upgraded membership, everyone in your social circle will be able to start saving money.
7. Get Your Energy Bills Under Control
One way to save money is to reduce the amount of energy you use in your home or apartment. You can drastically reduce the amount of money you spend on utilities by revising some of your home power habits. Simple things like light bulbs, heaters, and air conditioners can be turned off when not in use to save energy. In addition, the type of electronics installed in the home has a major impact on the amount of power consumed. Using more energy-efficient appliances will end up saving you money over the long term too, even if they are a little bit more expensive to purchase up front. Another way to cut energy costs is to repair damaged utility infrastructure in your home, such as leaking pipes or shoddy insulation, to avoid waste and save money.
8. Get Your Tools Out and Fix Your Own Stuff
Have you considered putting some of your useful skills to use in order to save money? Consider doing some of the simpler home repair tasks yourself, such as replacing light bulbs or replacing leaky faucets. If you aren’t used to doing certain things, you can always ask your neighbor for assistance rather than paying for everything. YouTube is also a great place to start when it comes to home repair too.
9. Save Any Unexpected or Extra Cash
Don’t ever let a cash windfall go to waste! Unexpected funds will almost certainly come your way, either as a result of holiday gifts or from investments. When you receive such money, instead of acting on just spending it on anything right away, exercise some restraint and channel that money into your saving plan.
10. Avoid Making Impulsive Purchases
Do not ever buy items on the spur of the moment. Experts advise that anyone who wants to save money should follow the 24-Hour Rule when making any purchase, especially one that is expensive. It is recommended that for any non-essential goods, a 24-hour wait be made from the time of setting the intent to purchase it. This rule is highly recommended for internet purchases because items can be added to a cart and kept there for up to 24 hours without being purchased, saving you money if you decide not to buy it after the fever breaks overnight.
11. Make the Library your Primary Source of Entertainment
It’s time to make the library your first port of call when you’re looking for something to do for fun. Libraries serve as a repository for all forms of free entertainment these days, including e-books and audiobooks as well as films and even video games. Rather than wasting time and money on other forms of entertainment, you should go to the library, where you will get more bang for your buck. In fact, many libraries allow you to borrow not only books but also tools to help you with your education.
12. Offload Little Used Items to Save More
There are probably a number of items in your home that are unused and irrelevant to you. Rather than leaving these tools, components, and basic items unused at home, sell them for a small profit, reducing the clutter in your home. Several online sites, such as Craigslist and Facebook Marketplace, facilitate the sale and purchase of these lightly used household items. Additionally, rather than selling these unused items, you can barter them with a neighbor or friend for an item that you require. This way, the money that was supposed to have been used for the purchase of the needed item can be saved. Aside from goods, you can also barter your skills for items or another service as well.
13. Use a Step-Down Spending Strategy
You can save more money by tailoring your spending habits to your goals. Step-down spending implies that you spend on what you want but spend less on it. For example, instead of going to the theater to view the latest movie, you can watch it at home through a paid subscription, which is much cheaper. You can also choose to watch it at a less expensive venue or get cheaper tickets by sitting in the back, whichever you prefer. So, rather than foregoing the things you really like to do, compromise a bit and find a way to enjoy them in a less expensive fashion.
14. Set a Budget For Gifts To Family Members
It is acceptable to spend money on gifts for friends and family members. In fact, giving gifts is an important way to express gratitude and love to others. However, there should be a cap on the amount spent on such gifts. Most of the time, organized family gifting can put a strain on your finances. It is critical that you discuss this issue with your family and, if possible, implement a system that allows for the purchase of one gift per person during the holidays. This will relieve financial stress and allow you to focus on more important matters during special celebrations.
Parting Thoughts: Get Started on Saving Money Today
Saving money is challenging, but it is not impossible. If you try out a few of the tips listed above, you will likely find your bank account expanding by the end of the month, even as your spending declines. So, what are you waiting for? Put these tips to good use and start saving your money today!
Thanks for reading how to save money.