It is possible to save money in all areas of life. Thanks to numerous saving tips you can come up with a plan that helps you get the most out of your money. That’s why we came up with these 7 tips to help inspire you to save as much money as possible this year!
Saving money – How to do it right?
Some people are very frugal by nature. Others find it very difficult to save money. The best way to start is to get an overview of your finances. Only if you know how you spend your money every month can you improve and start saving. Write down exactly what you spend your money on each month. The next step is to optimize your costs.
The Money Tip
Many people know the costs of rent, insurance premiums, mobile phones, etc., but what about the costs that are not so easy to understand – for example, food, drinks and entertainment? There is a simple trick to finding out how much money is spent in these categories.
Estimate the amount and withdraw the money at the beginning of the month.
All expenses that fall into the food/drinks/leisure categories are always paid with this money. If you run out of money during the month, withdraw more, but remember how much you have withdrawn. After two months you will know how much you have spent in these categories.
While not necessarily helping you save, this gives you the clearest overview of your spending habits. And trust me, the best way to save money is to know exactly where it is going.
Save with your banking, investments and taxes
A good way to save money is with money itself. The digital age offers enough alternatives here to save the monthly fees for maintaining a current account and for transfers.
Direct banks respond very quickly to e-mails and can be contacted by telephone. If you do not attach much importance to personal advice, a direct bank is ideal for you. Here you benefit from the advantage of saving on current account costs. Changing banks is very easy and runs smoothly.
So consider an online only bank as they can save you a whole lot of money in the long run. I’m sure I’m not the only one who thinks it’s absurd to have to pay money just to have it on an account and ready for a bank to use.
Avoidance of consumer debt
To save money, it is important to avoid certain things. These are typical financial mistakes, such as a surplus credit for a new car that loses a lot of money after the first drive, an overdraft on the credit line and consumer debt.
These are just a few examples. There are many other mistakes that many people make without knowing the negative impact on their assets.
That’s why it’s best to avoid consumer debt altogether. And I get it, it can be quite difficult sometimes, but at the very least, mull over any purchases that require credit for a month, and see how you feel.
Keep a cash emergency reserve
Always keep a cash reserve for emergencies. One of my favorite ways to do this is with mason jars. I put them deep in a closet or the basement and forget about them until they are absolutely needed.
So when that $2000 car repair bill comes, you have the money in cash and don’t need to touch a credit card, or even take the money from your chequing account.
I don’t know what it is, but it almost feels like found money when you you keep a cash reserve. It allows you to pay for a large repair without seeing the number in your bank account dwindle.
The piggy bank and the $5 challenge
Empty every penny into a coin box every night. You will only notice small amounts, and at the end of the year you will have a proud sum without having noticed any difference in your lifestyle.
If you have a little more money available, you can also try the $5 challenge. Here you take the $5 bill from your wallet every evening and put them in your piggy bank. Participants will have saved several hundred dollars after just a few months.
To put this into perspective, if you did this for a full year, you would end up with a total of $1825 saved in a piggy bank! Now that’s not bad!
Learn the basics of investing
Saving is an important area for wealth accumulation, but if you leave your money in a savings account, you will suffer losses in the long run as purchasing power decreases due to inflation.
Therefore, you should take a look at investing your money. However, it is extremely important to educate yourself and learn from the mistakes of others before making any moves.
You will then benefit from a much higher return than with a savings account. Once you know the risks and possible pitfalls, you can develop a strategy for making money.
The key lies in continuous training. Only those who know the effects of their financial decisions can avoid making the wrong decisions. There are a dozen opportunities for further training. Read a book on the subject, attend a seminar or do research on the Internet. With the right initiative and a little courage, your money will work for you.
Save money on your tax return
Tax season can be one of the most stressful periods of the year. However, did you know that many people make mistakes on their tax returns?
By not knowing the full extent of individual tax law, you could be leaving a lot of money on the table, ripe for the picking by the government. I mean, surely you don’t want to give them more money than they deserve do you?
That’s why it’s important to educate yourself when it comes to taxes. Take the time to learn the ins and out and you might just save a lot of money every year.