Earning plenty of money, not a big deal but saving it to build your wealth over time is. After all, nobody becomes rich overnight. Saving is something everyone wants, but only few can work for it. To make regular savings means you have to cut through your daily or monthly expenses which are what most people struggle to do. In other words, saving a good chunk out of your monthly earnings can be difficult if you end up spending most of it each month. To make savings easy for you, here are some useful tips that’ll help you build your wealth without doing significant expenditure cuts.
1. Cut Your Expenses By 5%
If you like to spend a lot, that’s not a problem. Just make sure that you save at least 5% from it. Saving this much shouldn’t be a problem no matter how much you earn each month. For instance, if you make $100, you just need to spend $95 for the whole month. Think that your pay is $95, and not $100, it will help you save that $5 every month. If you still find it difficult, buy a piggy and put the $5 bill in it early in the month.
2. Cut Down Unnecessary Expenses
A cursory look at your monthly bills will reveal that you may be paying many unnecessary costs each month. These might include your utility bills, the internet, cable, movie subscriptions, annual credit card fees, home rent insurance, and car insurance. Out of these, make a list of things that you don’t use too much and remove them. For instance, most movie subscribers barely watch a movie or two every week, so cutting this expense will save you at least $10 for the month. Similarly, give your phone usage a review and check the volume of calls, data plans and SMS you use each month. Most mobile users pay way more than what they use. For instance, you may be paying $200 or more while using just $100 or less. Buy a cheaper free plan and make significant savings on your phone bill next month. Do the same with your banking service and check if you are paying $150 to your bank just for balance inquiries. It is not worth to pay that much each year so switch your bank account and save $150 you spend on your existing one. Make it a regular practice to scrutinize your monthly bills each month; it will help you make decent savings every month.
3. Improve Your Credit Score
Life would be much easier if there were no credit right? Perhaps not. Think about all the benefits your credit provides you. Now, imagine that you could somehow reduce your credit score after a while, which is not all that difficult. Naturally, no one can remember when and where he took credit and spent it on. To make it easy, just ask for a copy of your credit report each month. You can check about what is hurting your credit score and make necessary adjustments to it if and when possible. The sooner you address your credit history, the more savings you can make each month.
4. Make Savings On Your Clothing
Buying new clothes every season is no longer an oddity, it is a trend and will likely stay for a while. The question here is whether spending hundreds on buying expensive every quarter is justified? Check out your closet; you’ll find plenty of new fabulous clothes still laden with perfume fragrances. In case you don’t like wearing them anymore, better sell them online to sites like ClothingRIC. You’ll also find affordable schemes to buy new and trendy clothes with deep discounts and coupon deals. Also, try making significant savings and buying from the best deals available online.
5. Prepare Monthly Budget
No matter how much you earn, making monthly budget always helps. It is the budget that’ll force you to streamline your expenses and savings. The budget will help control spending and will have you concentrate on more important things instead. It is important that you consider developing your budget by calculating all expenditures for the month. Missed out on some expenses? Don’t worry, as you can add it to the budget later. Just shake your memory and pile up the most common expenses like utility bills, clothes and food, rent and car maintenance among others.
6. Reduce Your Debts
By making the budget, you’ve already taken the first step in reducing your debts. Once you’ve successfully identified things where your money is going, it would become easier to save money for paying debts. Depending on how much debt you owe to banks and financial institutions, you can devise a plan to pay it on the monthly or quarterly basis. Most people find paying monthly installments easier compared to quarterly ones. The reason is simple, the longer your debt stays, the more interest it piles so you should plan to pay and clear your debts as soon as possible. Having difficulty paying the debt? Just visit your bank and ask them to schedule a simple way to make your debts soon. Whatever plan they give, try to accommodate it into your monthly budget and clear some amount each month. This way, you will hopefully settle your debts much sooner.
7. Get Your Life Insured
To a lot of people, life insurance remains a bit of a mystery. After all, you are required to pay a reasonable premium once or twice a year against your insurance for many years. For some, insurance remains a liability until you pay all of its premiums, for others, it is an asset from the word go. Either way, your life insurance will likely pay you a decent sum of money once you’ve paid all premiums. Add profits and dividends you earned while you were paying installations. Insurance can also double as your retirement plan as you’ll likely get it when you are nearing retirement.
Follow this seven golden money-saving tips, and they’ll help you build your wealth over time.