3 Tips on How to Save Money Each Month
We could all use a bit more cash in our wallets, but with how busy our lives can be and how expensive essential items are, how can we end up saving more than we spend? Is it possible to save even if our salaries aren’t as high as we would like? The good news is that saving can be easier than you think.
To begin saving every month:
- Establish a detailed budget plan that is realistic
- Follow the “30 day rule” when budgeting
- Open up a good savings account to make the most of your money and separate it from spending money
With a few healthy spending habits and the proper plan in place, you’ll be able to save a lot more money than you might imagine. Every dollar adds up, and you can bet that a little bit of budgeting goes a long way.
Is Saving Money Each Month Possible?
One of the best things you can do to plan your future is to start saving money. The more money you save, the more prepared you’ll be in case of emergencies and the more you’ll have when you actually want to use that money. You’ll be able to take vacations, buy fancier clothes and cool tech, and even have cash left over.
Saving money each month can be easier than you think with a little bit of planning. By cutting out unnecessary expenditures and making a solid plan for what to do with your income when you get it, you’ll be able to balloon your savings account in the background without you having to work extra for it.
Some things you could cut down on spending include:
- Eating out every day. Did you know that one of the biggest things you can do to save more money is just pack lunch instead of eating out every day? Think about it, if you spend $10 on lunch, 5 days a week, 4 weeks a month, that’s already $250 a month, on just one meal out of 3, just for yourself!
- Subscription Services. We all love our Netflix and Gym memberships, but sometimes, these monthly fees can stack up, even if we don’t realize it. If you find yourself not watching as much tv or not going to the gym as often, consider cutting them out and finding alternatives such as buying Blu-rays or taking jogs in your neighborhood to save monthly.
- Premium Products. Often, the things we buy everyday can have higher price tags just because of their brand names. Consider switching to store brand items or less luxury brands of the same items to save yourself the extra cash.
Often, the little things we don’t consider add up over time to contribute to huge costs. If you want to watch your gains overtake your losses, then you might want to consider taking a good look at all your expenditures and seeing which ones you can cut back on or live without.
How Much Money Should I Save Every Month?
The amount of money you should aim to save every month is determined by your income and expenditures, but a good rule of thumb is to save at least 20% of your income on a monthly basis.
If you save this much, you’ll notice that not only will your savings account exponentially grow, but you’ll be also more organized with what you save and what you spend. Following the 50/30/20 rule is a great way to keep track of your cash flow and ensure that you never overspend.
This is where you divide your money up by a percentage that can universally help everyone budget in a better way regardless of how much income directly brings in. You can divide up your salary through the month.
This number is determined by 50% of your income going to essentials and living expenses like food and rent. 30% is your “fun money”, which you can spend on entertainment, hobbies, going out, etc. while the last 20% are your savings.
Once you add to your savings, you’ll be able to better keep track of where your money is and where it’s going, and you’ll notice that 20% of your income can stack up real quick, after all in just 5 months, you’ll have saved an entire month’s worth of salary!
What Is the Quickest Way to Save Money?
If you want to save money fast, you could try Looking into your existing account and establishing a plan for how you want to budget it. For example, if you have $2000 in your account, you could settle on a percentage that you want to save and transfer that money into a new account that could be solely dedicated to your savings.
By planning ahead of time and knowing how much you’ll be saving every month you’ll find that your account will grow a lot faster than you anticipated. This is because most people don’t realize just how much they spend on a day-to-day basis.
One mistake people often run into is impulse purchases. This is where you decide to just spend money while window shopping or on your way to do something else without thinking about it. It could be a quick cup of coffee on the road or something as big as buying an entire game system or tablet just because it looks cool. Both big and little purchases like these can stack up very quickly without you realizing it.
However, you can control this by setting restrictions on what you spend where and how much because you might be able to avoid the temptation if you consistently make an effort to plan each purchase.
If you’re always ready to whip out your wallet on any given occasion, you’ll find saving money a lot harder because you’re often not thinking of the way that these little purchases stack up.
For example, if you stop to get a large coffee in the morning, then eat out during your lunch break, then you stop for gas on the way back and buy a bag of chips, and then at home you buy something nice off Amazon, you may have already spent over $50 in unexpected and unnecessary bills.
What Is a Good Savings Amount?
How much should you have in your savings account as a general rule? It’s recommended that you have enough savings to cover six months of expenses at the minimum. This is to account for any sudden emergencies that may spring up and gives you a solid foundation for you to stay secure.
Obviously, the situation for every individual is different depending on where they live and what their expenses are, but with a fund held securely, you can prepare for any situation until your income and expenses stabilize again. Having this much saved can help you retire on time, or in the case of emergencies popping up, have something to fall back on.
Any kind of saving is a good saving, especially in the long term. We can’t predict how things like inflation or product prices will affect us in the future, but we can be prepared by holding on to as much savings as possible.
At the end of the day, there are lots of ways that you can utilize to help you budget better and spend less money overall. The more you save, the more you’ll be grateful to yourself later on when it’s time for that money to be put to use.
What Is the 30 Day Rule?
One way to get yourself in the habit of saving more is the “30 day rule”, where you hold off on impulse purchases you want for at least 30 days. At the end of the time period, if you still want the item, then you can go for it!
This can help you by giving you a guide for where your money goes. If you always keep your “fun money” held for a little while, and you know how much you’re spending every month on the bare utilities, then the remaining cash left over is going to grow because you’re unlikely to spend it once the 30 days are over. This means you’re budgeting better because you won’t be as prone to spending your cash on the spot.
With this rule, you might be surprised how much holding off on little purchases can save you in the long run. By limiting yourself to a certain percentage every month that you’re allowed to spend on whatever you feel like, you’re naturally less tempted to overspend on everything else.
What Types of Accounts Can I Save Money In?
There are a number of ways in which you can store the money you save, and these types of accounts have their own unique pros and cons.
- Savings Account. A savings account is a type of account where you can deposit cash, but not withdraw it unless you go through certain processes. A savings account will grow over time thanks to interest, meaning you’ll earn money automatically. Types of savings accounts include Money Market Accounts, Certificate of Deposits, and Cash Management Accounts, which all provide high interest rates.
- Checking Account. Your regular bank account could be a suitable enough place to store your extra cash. You’ll have immediate access to your funds and you’ll be able to keep all your money in one place. You can avoid monthly fees if you go with a Credit Union location.
- Retirement Fund. Invest your money in an IRA to plan for your future and be prepared for retirement. These funds have tax advantages and allow you to accrue wealth that you can come back to in the decades to come.
Once you get into the habit of saving money more often, you’ll be amazed how much your cash will grow. You’ll only have to establish a few smart spending habits and keep track of all your purchases to see huge results. With the extra money you saved, you can be less worried about buying nice things when you do want to spend or you can begin to look into investments to make that money grow further.
To recap, you can use to save your money by creating a budgeting plan where you track where your money is going, dividing your money based on percentages of how much you’re allowed to spend and how much you need to put in savings every month, and cutting down on extra spending that might be adding to the holes in your wallet.
There probably isn’t a single person out there who doesn’t wish they had more money, but most people don’t realize that it’s a relatively simple process to grow their accounts and wealth that they might not have realized was there all along.
