When it comes to saving money, most people start off with good intentions, telling themselves that they’ll do more when they get a promotion at work or hit a certain age. In fact, countless people every year choose “saving more money” as their new year’s resolution. However, the truth is that there’s no right time to start saving. You don’t need to wait until the beginning of a new year or a specific era in your life. However, you do need to have some practical habits and tips that you can rely on to guide you in the right direction. If you think that you’re ready to start making a difference to your savings in 2020, then the following tips could be just what you need.
Step 1: Have a Plan for Debt
Debt is something that most of us just can’t avoid in life. The chances are that unless you were born into money, or you get an amazing job the moment that you leave school, you’re going to have some kind of debts to deal with. As you move through life, you might take on more credit to help you afford important things like home renovations or new cars.
Debt isn’t a problem as long as you know how to deal with it. Make sure that when you’re figuring out how much money you have to spend at the end of each month, you put some extra cash aside to deal with your debts as quickly as you can.
Step 2: Stop overspending on Food
It’s easy to convince yourself that you can spend as much as you like on food because it’s a “necessity”. However, there’s a difference between buying the food you need, and overspending on treats. The next time you’re going to go shopping for food, start by writing a list of all the items you’re going to need to make the meals that you want to eat that week. When you go to the store, take nothing but the cash that you need to pay for those items. This way you won’t be tempted to buy extra things just because they’re on sale, or you’re feeling hungry when you’re browsing the aisles.
Step 3: Stop Paying Automatically
Some things are useful to pay for automatically, like the gas and electric bills that you deal with by automatically. However, there are a lot of other subscriptions in your bank account that you might have forgotten about and be paying for without needing them. If you’re low on cash, you don’t need to be paying for six different streaming sites at once. Pick one or two that you want to keep and cancel the rest. Every few months, spend some time going through your bank statements and asking yourself whether you really need all the subscriptions you have. Canceling your memberships could save you some serious cash in the long-term.
Step 4: Buy Generic
More often than not, the only thing that’s actually better about a branded item is its marketing. When you’re paying over the odds for a brand-name pair of socks or some brand-name yogurt, you’re not getting anything hugely different – you’re just paying for the label. If you want to save more money next year, stop paying for brands and start paying for the items that you actually need instead. The only time you should pay more for a better brand is if you know that the item is going to last you longer. For instance, it might be worth paying for a name-brand coat if it means that you can wear it for two years instead of six months. Of course, that tip only applies if you think you’re still going to have the same sense of fashion a couple of years from now.
Step 5: Invest
Finally, when you start to discover that you have a little extra money in your bank account, make sure that you know how to use it wisely. In other words, don’t just buy a new stamp for your collection, or a video game, ask yourself how you can make your cash work for you. If you still have debt, paying it off will mean that you can save cash on interest in the future. On the other hand, if you don’t have debt to worry about, making small investments could be a great way to start building up a useful portfolio for your wealth in the long-term. Speak with a financial advisor about your options if you don’t know how to get started.
*disclaimer – This is a collaborative post*