Do you ever think of just how nice it is to save money? Or to spend less money? Or both? Consider how your life could be if you had tens of thousands — or even millions — of dollars in savings.
What type of liberty would that offer you? How would that alter your outlook on your job? How would that affect your capacity to help others?
What could you do if you’re truly financially free due to a massive savings account balance? How would this change your career path? Can it help you be in a position to consider some dream professions?
I will discuss a list of several different methods you can save money. Some involve learning how to spend less. Some demand hidden tricks to saving more. Both get you the same effect: more cash in the bank.
Interested? Let’s go!
Ways to Save Money by Spending Less
When I first started reading personal finance blogs in January of 2013, I was in a desperate place. I had no economies and tens of thousands of dollars’ worth of debt.
What was worse is that I had no idea how we had gotten into that much debt. We weren’t going on vacation. We didn’t shop at high-end stores.
I assumed the problem was that people didn’t make enough cash. After all, we were a family of six making well under $100,000 annually. That surely was not enough to survive on, right?
After months of (and continuing) education, I realized there was a great deal we had been doing wrong with our money. I didn’t believe we can spend, but shortly found out we could spend much less.
Here are a few ways you might have the ability to save more money by spending less. I’m going to get started with four tips that might throw you off a bit.
This is because they’re more about the brain than the money. However, they will set a foundation in you which will very likely affect how you manage money. Ready?
1. Start Spend Tracking
I tell people who spend monitoring changed my financial life. Yes, I know that it feels like a tedious and boring task that will accomplish little.
But trust me once I tell you it probably will change your life because it did mine.
At this time you can not alter your spending habits for the sake of this challenge. Just spend as you normally do, but write everything down.
If that seems like too much effort, you may want to get Personal Capital’s free financial applications.
It will track your spending for you, help you keep tabs on your net worth, and more. Here’s what spend tracking did for me: It helped me see the truth about our family’s spending.
You see, we’d frittered away a few dollars at a time before it mounted into tens of thousands of dollars in debt. We had been living above our means. But because we weren’t monitoring our spending we presumed it was an income issue.
Once we started monitoring spending we saw dozens and dozens of seemingly-insignificant purchases that added up to tens of thousands of dollars monthly.
Hundreds turned into tens of thousands over the years, all because we were creating forgettable small purchases.
You might be experiencing the same thing. It’s tough to remember all of those tiny daily purchases you make. Spend tracking will give you a quick glimpse at your monthly spending.
This huge picture look will provide you the information you need to re-evaluate your purchases.
2. Start Thinking About Your Purchases from a Value-Based Perspective
I am a big believer that great money management has a bit to do with mindset. If it’s possible to train your mind to consider money otherwise, you can learn to handle money better.
The problem was that the tiny purchases were adding up to big debt.
Then I heard about value-based spending. Worth-based spending involves assessing your purchases to decide whether they’re worth it to you.
- A Value-Based Spending Example
1 night after work you cease and receive $20 worth of Taco Bell for your family for supper.
You know you could have made dinner for $5 at home, but you’re tired and it’s late. In a value-based spending world, you would’ve ceased before you made that purchase.
And you would’ve asked yourself one question: Is this purchase worth me working an extra hour? Then you definitely would have followed up with other queries.
Like asking yourself if there was a way you can better spend that money. A way that is more in line with your financial goals.
There’s no wrong or right answer with value-based spending. Only you can choose which purchases are worth the effort you put in to produce the money to spend on them.
However, by knowing the answer to whether or not a purchase brings true value to your life, you can cut out non-value centered purchases.
In my family’s case, we realized that arbitrary drive-thru runs and snack purchases were not of value to us. And we were making far too many of them for sake’s sake.
Considering if a purchase is worth your hard-earned money before you make it’ll get you thinking differently about expenditures.
And also a value established spending mindset will probably be even more inspiring if you precede it with this step.
3. Make a List of Your Financial Goals
Perhaps you have produced a record of your financial goals? Do you have any idea what your financial goals are? Many don’t.
Instead, they just work to make it throughout the entire month, pay the bills, and be left something in the bank.
Nevertheless having a record of financial goals can help provide you with a big picture perspective on your cash. I recommend having a listing of short, medium, and long-term financial objectives.
Short-term financial goals are goals you can achieve in a year or even less. Medium-term financial goals are goals you can reach in one to five years.
Long-term financial goals are goals that will take you five years or longer to accomplish. Below are a few examples of short-, medium- and longterm aims that might help you create your own goals listing.
- Medium-Term Financial Goals
Pay off all consumer debt
Save up $15,000 to buy a new-to-me automobile
Establish an emergency fund comprising six months’ worth of expenses
- Long-Term Financial Goals
Pay off a mortgage in 10 years
Save $1 million in retirement funds in 20 years
Save 100,000 to fund child’s college expenses in 15 years
You get the idea. Just take a couple of hours one afternoon to think about what’s important for you. What matters to you as much as money is concerned?
Could it be being debt-free? Becoming financially independent? Having enough money to pay for your child’s college education?
Only you can choose which financial goals matter most to you. But once you do you are going to possess a driving force helping you to create value-based spending choices.
4. Save Money by Living With a Budget
The fourth part of the mindset cash game entails living with a monthly budget. You have got your spending monitoring plan in place.
You’ve learned about worth based on spending. And you’ve created a list of financial goals that matter to you personally.
Learning how to create and reside on a written budget each month will allow you to achieve these goals. A budget can allow you to establish a base that will direct your spending.
I used to think of budgets as limiting. I hated the concept of owning a piece of paper that dictated how I could spend — and the way I couldn’t.
But it was not long until I came to see that exactly what a budget provides you is freedom. A budget gives you a plan for your spending which will ensure you do reach your financial objectives.
It’s like your money’s BFF — always there for you to help you choose another step toward a terrific financial life.
If you have already got that down, head over to get Well Kept Wallet’s free starter budget form, and produce your budget.
We are going to talk about all the little hints and tricks you can use to save more cash.
Saving Money on Housing
Home is among the largest expenses a person or family can have. Here are some ways you can save money on housing.
5. Don’t Spend as Much as Your Mortgage Rep Says You Can
I worked for a national mortgage company for five years. I can tell you they often approve people for mortgage obligations which are rather high due to their earnings.
When you start thinking about purchasing a house one of the first things that you should do is get pre-approved for a mortgage.
Do yourself a favor and don’t spend up to your mortgage rep claims you can. You’ll appreciate the extra wiggle room in your budget during tight money months.
6. Plan Ahead for Big Expenses
1 way home possession can become very costly is because of repairs. Roofs, furnaces, and siding can be very expensive to repair and/or replace.
Don’t get stuck having to place big home repairs on a charge card. Rather, sock away a lot of cash each month in a savings account designated for house repairs. Simply make the monthly amount a part of your budget and have the money automatically deposited to the savings accounts.
That way once the huge expenses come, you are going to have the cash and will not be forced to get into debt.
Another way to save money on housing is to keep a watch out for utility use.
Running water with reckless abandon, insisting on absolutely comfy house temps, and leaving lights on in unused rooms will cost you cash.
Take a hint from your parents and begin being mindful of utility usage. Here are a few tips that will assist you to save money in that region.
7. Be Mindful of Water Usage
Run the waterless force when you are doing dishes.
Set the clothes washer water level into the size of the load you’re washing. Do not water your bud if it’s forecasted to rain during the week.
Install low-flow toilets and showerheads. All of these small moves may add up to big savings on your water bill.