For some people, saving is not an easy thing to do. Though they try and try but it still seems impossible for them to save. Do you always try to spend less and then wonder where all the money flew out of the sudden? If yes, then this one is for you. First of all, impulsive buying and a non-ending urge to spend are the main challenges that stand in the way of saving. You need to know that you don’t have to start with a drastic saving plan. Believe it or not, slight adjustments in your spending habits here and there will create a huge difference in the long run. Here is where you need to start if you have been trying to save money but never managed to achieve this goal.
1. Monitor your expenses and spending. There is no way you can save if you don’t have a clear view of where your money goes and how you spend it. All you need is a pen and paper where you jot down your expenses. Classify them into categories such as grocery, bills, shopping, etc. so you know in which area you spend the most. When you see the big picture you will be able to understand where you spend on unnecessary things. You can also use a mobile app for this task.
2. Separate the wants from the needs. You need to identify your financial priorities. Are you spending on the wants or the needs? Before you buy something ask yourself whether it’s a necessity or just a luxury. Also, go through your previous months' expenses, and you will notice you that spent a huge amount on things you don’t really need.
3. Spend within a budget. Set a fixed budget for everything and don’t go out of it unless something very urgent happened. For example, after you have understood your expenses in every area, set a fixed budget for every area and stick to it. The old envelope system can help as well. Pull out weekly cash and distribute it in envelopes for your fixed costs for example rent, utilities, groceries, and so on. Splitting the cash in that way will help you make sure you stick to the budget.
4. Create a saving account. Set a certain amount of your monthly income to be automatically transferred from your checking to your saving account. Ignore that saving account and don’t come near it under any circumstances. As an idea, leave its card at home so you don’t get tempted to use it when shopping at the mall.
5. Set saving goals. By setting goals you are more likely to commit to your saving plan. Set both short and long-term goals. For instance, set a goal of traveling abroad when you reach a certain amount of saving, or that you will buy a house as a long-term plan. Having an objective right in front of you will make you commit to saving and minimizing your expenses.