Easy tips to save money
If you see your paycheck before taxes, it looks like you have a lot of money, then you scan down and see what your REAL paycheck is and reality sinks in. If you aren't good at saving money, it can be a frustrating venture to live from paycheck-to-paycheck. It's not a smart way to live and you need to learn how to save quickly or else you will be in deep trouble. Saving money all comes down to your dedication. Do you really want to save money or are you doing it because everyone else tells you that you need to save money? Saving money requires your hard work to stop spending so much money and start putting this money towards savings so you have a safety net to use in case of emergencies. Here are some easy ways to help you learn how to save money:
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Tip # 1 - Spend less than you earn
This sounds easy enough but you would be surprised to see all the people that live outside of their means. One reason why people end up in debt is because they get credit cards and debit cards and they don't really know what their limit is. They see things and impulse buy with the mentality that they have enough money to pay it off before the due date. What is really sad is that most people don't really know how much they can spend because they have no idea what they earn and what their cost-of-living expenses are.
One way to teach yourself how to save is to write down all your expenses in the order of the most-important at the top. Now, write down your income and subtract the expenses from it. The money you have left-over should be divided into savings and then other purchases like groceries. You will probably be surprised to see that this money is a lot less that you thought it would be. Once you know how much you have, put yourself on a weekly budget. This way you will know exactly how much money you can spend each week on little things like a cup of coffee or a quick lunch.
Tip # 2 - Bye, Bye Credit Cards
If you struggle with saving money, the time has come to say goodbye to your credit cards. Since most people have at least $8,000 in credit card debt, it is time to learn that you don't need it. If you have credit card debt, you really don't want to use the cards because you will just increase your debt and pay more money in interest. You may want to consider keeping one credit that has a low limit and a low interest rate. This way you will have a back-up if your emergency fund is not enough to cover a big emergency like a visit to the hospital.
Credit cards should not be used to purchase groceries and other daily items. It's pretty sad when you are borrowing money and paying interest on it just so you could buy an apple. Calculate how much money you pay in interest each month and try to pay that much extra to the card that way the money you are paying will go to the principle balance not the interest.
Tip # 3 - Automatic Deposit
One of the best ways to train yourself to save money is to have the money transferred from your checking account to your savings account before you even see it. This prevents you from calculating this money as part of your income for the month and increasing your risk of spending it. Try to contribute at least 10-20 percent of each paycheck to your savings account so you can start to build a nice rainy day fund.
