Basic Financial Tips to Help You Save More
Your financial well-being doesn’t always hinge on complex economic trends and forces. Sometimes, it comes down to basic good governance. Here are four basic financial tips that can help you hone a practical and responsible money management style. One that helps you save more of your hard-earned cash.
1. Have a Budget
A budget is your finances’ best friend. Without it, it can be hard to know exactly where you are or where you’re going. It helps answer these questions by outlining how you’ve spent your money in the past. The trick is to track expenses for at least three months.
This time frame gives you a better understanding of trends that influence your spending habits. Once you’ve categorized these expenses, you can see what area of your budget takes up the most amount of your money.
Areas like housing costs and utilities likely take up a lot of your budget. Experts recommend these costs (and other necessary, fixed expenses) should take up anywhere between 50–60 % of your income. The remaining cash should cover savings, debt reduction, and fun spending.
2. Have Goals
When you have a goal in mind, it’s a lot easier to cut down on fun (yet ultimately unnecessary) spending. It gives a purpose to restricting your frivolous spending habits, so it’s not just in the name of mindless austerity. A goal can be simple, like paying off a payday loan or saving up enough to buy the new Pixel 3.
It can be exciting, like saving up for a 2-week vacation in the Alps or signing up for a new class. Your goal may be practical, like contributing to a retirement fund or buying stocks. Whatever yours is, make sure it’s personal and inspiring. When you save for something that makes sense to you, you’re more likely to save with success.
3. Learn More About the Financial World
Whether you want to or not, you’re constantly making decisions that affect your finances. What savings accounts to open, whether to use one line of credit or multiple online payday loans. It may be to find out which mutual funds to invest in, whether to pick a fixed or variable mortgage are just some of the choices you’ll make over your lifetime. You’ll be able to make better decisions when you understand the choices available to you.
Financial literacy is an important aspect of financial responsibility. You need to take the time reading about how money works to make sure you’re making the right choices for your situation. You should understand basic things, like compound interest, risk diversification, inflation, and numeracy if you expect to save, borrow, and invest your money wisely.
It’s also a good idea to seek out specific answers to your questions. For example, you can find financial tips for couples if you’re wondering how to best leverage your combined wealth. It can help you decide how to pay taxes, open joint accounts, and other specific tricks to managing money as a couple.
4. Automate Bills and Savings
It’s easy to forget to pay a bill when you’re busy. Just like it’s easy to miss a contribution to your savings when you’re spending your money elsewhere. By automating both bill payments and savings, you’ll never miss out on these important tasks again. Your savings will grow, and you’ll avoid things like late fines and added interest.
Automating bills and savings is easy when you bank online. There’s a way to set up a regular withdrawal from one account to a payee at specific times. If you aren’t sure how to do that, contact a representative at your bank for help. They’ll be able to guide you through this task.
Though they may be basic, these tips are a great start for anyone hoping to turn their finances around. Managing your money is easy when you keep it simple, so start small with the fundamentals, like using a budget.
The basics can transform your finances faster than you think.
How do you save more money?
Let me know, til then–cheers m’deres!
Nancy Polanco is a freelance journalist and editor of lifestyle blog Whispered Inspirations. A social media junkie, a travel-lover with insatiable wanderlust and an aficionado for fun gadgets, good eats, and entertainment. You can find her on Instagram and everywhere else under @WhispersInspire.