In these uncertain economic times, everyone is trying to build up their savings and cut costs. Every person’s financial situation is different, but everyone has room to save.
No matter what you’re earning, there’s always room to squirrel away some savings, even if it’s a dollar a day. A few extra dollars saved here and there can add up to more than you’d expect, though it takes time and patience to grow any sizeable nest egg.
So what’s the best way to reduce costs and grow your savings? There’s no one right answer.
What I’d like to do is give you a few tips that help you reduce frivolous spending and keep you on track to meet your saving goals, whatever they may be. You might be saving for retirement, a summer vacation, or just adding to a tidy sum meant for a rainy day. Whatever the case may be, this tidbit of savings advice is meant to help you.
1. Draft a budget that works for you
Any fiscally savvy person will tell you to make a budget to help allocate your spending and manage your finances, but doing so is a task easier said than done. It’s one thing to draw up an excel spreadsheet with general categories like “food” and “bills” and anticipate what you’ll spend on each, it’s quite another thing to dig deep into your spending habits and create a budget that really helps you.
There are a number of ways to create a functional and helpful budget. If you have a smartphone or a tablet, there are tons of financial planning apps that can help you build a successful spending plan around building up a nest egg (think Mint or an app offered by your bank).
These apps can send you notifications when you’re over or under budget so you always know where you stand with your finances. If you don’t have a smartphone, you can always keep a detailed written budget on a small notepad that you carry with you.
2. Plan meals for the week
Creating a budget makes it much easier to anticipate your spending, especially on necessities that soak up a lot of cash. People spend a lot more of their budget than they should on food, so this is perhaps the best area where you can realistically cut costs.
You can better strategize how to spend (and save) the rest of your finances if you plan out your meals one week at a time. Write down a grocery list big enough to accommodate several meals cooked at home, including all the necessary ingredients that you’ll need for tomorrow’s meal and the meal at the end of the week.
If there’s no way that you can see yourself eating in every day of the week, that’s ok—just be sure to include in your budget how much you intend to spend on food when you go out. It’s so much easier to manage and change your spending habits if you’re honest about them.
3. Avoid outings with people who splurge
Everyone has that friend that has a bigger and more disposable income, the one whose income is several times that of your own. While they might very well be your best friend, that doesn’t change the fact that they can afford to spend more on drinks and dinner than you can.
We’ve all had that kind of night: we go out with a group of people who have a more stable financial situation and who can stand to spend some serious cash, and we wind up spending way more than we had planned to spend.
Things like this happen, but they don’t have to be the norm. What’s important is that you take control of your spending habits by knowing your limits, and part of that means knowing who is a bad influence on those habits.
I’m not saying that you should stop hanging out with your high rolling friend, but you should think twice before accompanying them to an all-night marathon of cafes and bars. Friendship is important, but so is meeting your savings goals.
Susan is a freelance blogger who enjoys writing about automotive and health news, technology, lifestyle and personal finance. She often researches and writes about automobile, property and health insurance, helping consumers find free insurance quotes and the best protection available. Susan welcomes comments.
Photo Credit: krossbow