5 Money-Saving Strategies That Can Save You Big
How well do you manage your finances?
"There's too much month at the end of the money" is a common lament for many families. Expenses rise every year, but wages aren't keeping pace. It's tough out there.
Getting off the paycheck-to-paycheck treadmill requires doing one of two things. The first is to make more money, but that's tricky and usually takes some time. The second is to spend less money.
Most families waste a portion of their money through simply not managing their finances well. A tweak here and an update there can make a noticeable difference in how much disposable income you have.
5 Easy Savings Tips Anyone Can Use
1. Create a Personal Budget
By creating and tracking your personal budget, you can take a serious look at everything you do with your money each month. It helps you paint a detailed picture of your entire financial situation, which lets you see where you might be spending more than necessary. There's no better way to suddenly realize, "Wait! I spent how much on subscription coffee and razors?"
You can create a personal budget with online tools such as You Need a Budget, Mvelopes, and Mint, or you can craft one using Microsoft Excel. The end game is to get a better idea of where your money goes each month and identify areas where cutting back makes sense.
Be sure to revise and update your budget regularly. Don't simply input your monthly bills and income and leave the numbers to petrify in a spreadsheet. Expenses and spending habits change over time. Make time to go over your budget and review how you did each month. Then, adjust things as necessary.
2. Reduce Your Monthly Bills
Get into the habit of searching the Internet for ways to reduce your monthly bills. There are plenty of strategies to lower what you pay for smartphone data, home energy, Internet service, cable TV, and many other services. Competition between service providers is fierce since information is just a few clicks away for consumers. Take advantage of that to keep more money in your bank account.
Contact your service provider directly to negotiate a rebate, or sign up for a money management chatbot such as Truebill or Charlie. Both of these help you manage your money and keep an eye on your subscriptions and bills. Depending on who your service provider is, they might even be able to negotiate prices with them on your behalf.
Also, keep an eye out for offers from other service providers. Competition for phone and Internet service is especially fierce, and many companies bribe customers to change providers with perks such as cash and merchandise, sometimes worth up to thousands of dollars.
3. Start or Boost Your Emergency Fund
Imagine that you've paid off all your credit cards and you're ready to enjoy that extra money. It was a hard journey, but you succeeded. Then, your spouse loses his job. Or you get appendicitis. Or your car calls it quits.
Whatever the emergency, if you don't have the money to cover it, you might be forced to put it on that credit card you just cleared. If you haven't paid off your cards, it means adding to your balances, potentially damaging your credit rating by using up too much of your available credit.
That's why financial experts recommend an emergency fund equal to six months' worth of living expenses. Establishing this fund can be as hard as paying your cards down to zero, but it's essential. A "slush fund" to help when things go wrong means you worry less about money when things go right.
4. Cut Automatic Spending
Automatic spending falls into two categories. There are the little purchases you make without thinking too much about them - expensive lattes, eating lunch out every day, cigarettes - which can add up to hundreds of dollars per month. These are easy to spot when you start budgeting and paying closer attention to your spending.
Then there are the recurring fees that hit your bank account automatically, without you even noticing, month after month. Curbing these can save you well over $1,000 each year.
Go through your budget with an eye out for recurring expenses such as a gym membership you never use or a subscription to a magazine you rarely read. Challenge yourself to cut as many of these expenses as you can. Most people find they prefer the extra money and never miss the things they used to buy with it.
5. Switch to Generics
You likely have a few brand loyalties that are important to you. Maybe you like Coke more than store brand cola. Maybe you like to treat yourself to some Ghirardelli chocolate once in a while. That's OK. Money is a tool to create the life you want, and not allowing yourself a few little treats can lead to frugal fatigue.
But for everything else, go generic. You can save hundreds every month by opting for the "off-brand" or "store-brand" option. Don't spend big money on craft coffee if you know the store-brand beans are just fine by you. Don't spend $150 on school supplies at Office Depot when $20 at the dollar store gets you the same stuff.
Spoil yourself on the two or three things that matter most to you, and go cheap on everything else.
If you've never put any thought into money-saving strategies, don't make the mistake of trying to adopt every strategy at once. Start slowly by adding one or two in the first few months. Take the time to make sure you're doing them right, then add the rest in as you have time. It might take a bit longer to start noticing sizeable savings, but once you do, you'll have built sound and steady financial habits that will lead to long-term success.
Do you know of any other money-saving strategies that folks should adopt?
All content provided in this blog is supplied by Carly Fauth and is for informational purposes only. Barclays takes no position as to the views, and makes no representations as to the accuracy or completeness of any information contained in the blog or found by following any link within this blog.
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