14 Money-Saving Tips to Improve your Financial Standing
We all want to save money. Saving money is a simple concept, yet frustratingly difficult. And whether it's by denying yourself that $5 macchiato or putting off a weekend getaway, everyone has their own way to save. Here are 14 money-saving tips and easy adjustments that you can make to increase your long-term savings:
1. Budget, track and save
Creating a monthly or weekly budget is an effective way to set some guidelines in order to alter your spending habit. If you are speeding more than you’re earning, falling deeper and deeper into debt, you should be trying to figure out why you’re overspending and on what. Are you constantly ordering take out? Is your rent too expensive? Once you begin tracking your spending you will find it easier to individualize what financial habits need to be modified. If you find yourself falling out of your budget plan when the holidays come around, prepare in advance so that you won’t find yourself spread thin to make sure everyone in your inner circle is getting a gift. You should be checking your bank statements every month. Often, websites and applications will make you subscribe to their services offering a free trial, leading to monthly charges being taken out of your account without realising. This is why it is important the you constantly check your bank account to make sure that the transactions going in and out are all for stuff that you are actually using.
Remember: big time purchases aren’t necessarily the things that put us in debt, so make sure to track your daily spending. Once you feel like you have budgeted in an efficient manner that works for you, you should start thinking about saving up for an emergency fund.
2. The 50/20/30 budget strategy
Following the 50/20/30 budget rule is an amazing way to categorize your net income by distributing your after-tax income in a way that will allow you to spend 50% of your income on needs, 20% on savings, and 30% on wants. It is important to distinguish between needs and wants; needs are financial commitments that you cannot give up, such as household bills, while wants are things that will add quality to your life but that cannot be defined as financial obligations. The rule states that 20% of your after-tax income must fall into savings and debt repayments. If you have debts, make sure that you prioritise repaying them before you begin saving for an emergency fund. Once those debts have been repaid, you should try to hold a couple of months’ worth of savings for unforeseeable circumstance, such as medical bills. Remember that saving must be risk-free, so investing does not count as saving.
3. Prepare your own meals
Finding your way around the kitchen should become your number one priority if you’re looking to save money on meals without giving up on great tasting food. If you often find yourself throwing away food because it has gone bad before you’ve had the chance to eat it, these storing tips will help you make better choices in regards to your spending habits. Keeping bread in the freezer, using all of your leftovers and utilising air-tight containers are just some of the ways in which you can keep all of your food fresh, ensuring that nothing goes to waste. If you have a busy schedule and cooking elaborate meals is not an option for you, meal prepping is one of the best things you can do to save time and money. Preparing your meals for the work week in advance is quick, environmentally-friendly and good for your body. There are so many amazing resources online that will help you meal prep, some of which are linked below:
4. Get smart about discounts
Using coupons is an awesome way to save money. Online coupons in particular are easy, quick, and efficient; you can find discount codes for basically anything you can think of. In regards to sales, be aware of the sale illusion. Sales are a strategy used by marketers to make consumers spend their hard earned cash on things that they don’t really need. If you are buying something simply because it looks like a great deal, it probably isn’t that great of a deal to begin with. Asking for a discount whenever you can should become one of your most used money-saving habits. It is low-risk and high-reward. The number one rule to follow when asking for a discount is to always be polite, even if the answer isn’t what you expected. Customer service will be more willing to help a well-mannered customer. Lastly, consider buying in bulk, as it can be a great way to save money if done correctly. However, don’t bulk buy products that you haven’t used before, as you might not like them. Always go into sales with a clear head, and be aware of discount traps.
5. Invest in a coffee machine
Your daily Starbucks trip could potentially be costing you as much as 7% of your after tax income; this is money that can easily be saved by making a one-time purchase of a coffee machine for as little as $21. Most people aren’t aware of the impact that these coffee trips have on their finances, as they are spread out over multiple days, but these small purchases are just as bad, if not worse, as a big shopping spree. If you’re a coffee lover who can’t start their day without a caffeine kick, an instant coffee machine will become your best ally in your money saving journey. There are many affordable coffee machines on the market, some of which are linked below:
6. Focus on your credit score
Keep up with your credit score by fixing mistakes in your credit report and by making a conscious effort to improve it over time. Improving your credit score should become a priority because it will make you eligible for a loan at a low interest rate if you ever need one, and it is an active way to make sure that you are not spending too much on your credit card and that you are not late on your bills, as these things impact your credit score massively. You can boost your credit score by utilizing your credit card carefully, making small purchases on a daily basis, paying all your bills on time regularly and always staying below your credit card limit. Ensuring that you always pay your bills on time will save you money by avoiding paying interest or late fees.
7. Car maintenance
If you own a car, car maintenance is often something that will eat up your net income frequently and quickly. One of the easiest ways to save money on car maintenance is by doing your own oil change. The first step is to figure out what car oil your car needs, then purchasing it online at a cheap rate. Often times, your car owner’s manual will suggest what engine oil should be used in your car. There are also a lot of other things that you can do to make sure your car remains safe and efficient, some of which are changing your engine coolant. Engine coolant is another affordable item that you can purchase on your own. Taking care of your car is extremely important to building efficient financial habits, because if you keep your car in check you won’t have to purchase a new one prematurely. Your vehicle will also remain safe at all times if taken care of properly.
8. Sell your unwanted items
Sell the things you aren’t using anymore, as you’ll be surprised at how much money you can make by selling things online. This is an activity that is environmentally-friendly and great for your wallet. Clothing items that are out of fashion, pieces of equipment that you aren’t using anymore, furniture that’s taking up space in your storage, and books that you’ve already read are all great things that you can sell online to make a small fortune. There are many great websites online that will suit all of your needs in regards to shipping and selling. Picking a platform on which to sell your things can be daunting as there is an oversaturation of websites that serve the same purpose. One of the best platforms to sell your items locally is Facebook Marketplace. If you want to make the most out of this activity, make sure to always be honest about the condition of the item you’re selling.
If you’re looking to buy equipment, it is usually better to rent before committing to an investment. Renting will allow you the option of giving back the item when it no longer has a purpose, and it will allow you to always have the best equipment on the market. The misconception about renting is that it is cheaper to buy, but in a lot of cases it takes years for your rent money to add up the cost of the item itself. Renting also gives you the option of giving back the item when you can no longer afford it, keeping you out of debt. There are certain things that are better to rent than others, such as gym equipment and musical instruments. If you are unsure about whether you want to learn a new instrument or not, try to rent one before committing to buying. For example, when you decide to rent rather than buy gym equipment you will be able to use higher-quality, more expensive equipment than you can afford when you buy. You should always be renting before you decide to buying.
10. The 48-hour rule
Sticking to the 48-hour rule is a great way to avoid regretting a purchase, especially if you are window shopping online. You should not buy an item online before you have waited 48 hours. It is far too easy to add things to your cart with the click of a button, while entering your card details online makes you feel detached from how much money you’re actually spending. You should limit yourself when buying things online as much as possible, as it can be an easy way to hoard things that only take up space and money and add no value to your life. Buying online is great because you can get amazing discounts, however make sure that you do not overdo it. Sticking to the 48-hour rule will help you follow your budget, avoiding debt and high credit card fees.
11. Add value to your life
By choosing quality over quantity in all aspects of your life, you are putting value on yourself, raising your overall standards. In particular, you should pick quality over quantity in relationships. The people you surround yourself with affect you in crucial ways, from motivating you be better to simply putting a smile on your face. Being around people who are ambitious and who are doing admirable things will teach you skills that will also help your financial habits in the long run. Choosing quality over quantity in food is also important because the food that you put in your body will have a huge impact on your health and ability to live a long, meaningful life. You should always prioritize spending money on food, while investing time in building positive relationships. By raising your standards of life, you will reach a better financial situation as a result.
12. Quit smoking
Not only is smoking terrible for your health and overall wellbeing, it is also an incredibly expensive habit to upkeep. If you are a regular smoker, you could be spending up to $5,000 a year on cigarettes. Quitting will help you save thousands of dollars a year, leaving you in a better financial situation. Smoking will cause you to feel significantly worse in the long run, so quitting smoking will raise your quality of life exponentially. This is a destructive habit that you will be immensely grateful you gave up. If you feel like you are unable to stop, the Centers for Disease Control and Prevention (CDC) website has some great articles and tips that will help you kick this bad habit to the curb.
Learning some DIY an amazing way to be creative and save money in the process. An example of things that you can DIY are gifts. You don’t have to give up gift-giving to save money if you decide to get creative with it. Gifts don’t have to be expensive to be good, and in fact the gifts we cherish the most are the ones that are thoughtful rather than expensive. DIY is a great way to make gift-giving special, as it will give you the option of making amazing personalised gifts that will be deeply appreciated. Additionally, if you decide to make DIY a hobby, you can learn transferable skills that will help you in your career, such as sewing or fixing household items.
14. Find balance
You should never be spending more than you earn, so establishing a good work/ play balance is crucial to making healthy financial decisions. It is very important that you take a break after a long work week, because doing so will make you happier and more productive in the long run. If you are saving up for a big purchase, you should also be looking to work smarter rather than harder. You should be accepting jobs where you can use your skills effectively; you should not be doing work that eats your time without appropriate compensation. Eventually, you should be looking to create multiple streams of income, so that you can create a steady cash flow. Once you have saved up enough money to feel happy about your financial situation, you should be looking for ways to create passive streams of income through investing.