We all can become better at saving our money. In fact, a large percentage of most people’s financial problems are derived from less than satisfactory money saving strategies. Here are 5 tips to become a better money saver.
It’s very difficult to save money, if you first don’t know exactly how much your spending each month and where your expenditures are going. While many of us know that most of our money goes to our mortgage, car loans, insurance, etc, you will be surprised how very small purchases can add up. For instance, a coffee and donut each month can be well over $100, you might find that you are spending large amounts of money on entertainment, phone bills and traveling costs. Using a budget you can clearly and easily identify your major expenses and cut back on those that are less important. This way you can free up more money each month to save.
In order to ensure that you save money each month- make sure you pay yourself first. While an easy concept to follow, most don’t have the discipline to even save $50 per month. Once you receive your paycheck, before making payments- whether it is to your mortgage, car, etc pay yourself first. Choose an amount that you can live with like $50 per pay period or more (if you can afford it). And don’t worry; you still will be able to pay all those bills.
Another great strategy for saving money is to open up a 401K plan. Most employers offer these plans for their associates and you can put aside a percentage of your income each pay period which can be invested in a variety of ways. For instance, you can invest your saved income in stocks, money market funds, company stock, mutual funds, etc. Not only will you save a portion of your income each pay period, the money saved in these plans grow tax free. You only pay taxes on a 401K plan when you withdraw your savings.
While saving money can be extremely difficult, using these three basic and easy strategies can help you save thousands of dollars each year with just a little bit of effort on your part. So what are you waiting for? Start saving today!
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