Save More and Spend Better with These Real Money Saving Tips
Finding it difficult to pay your bills in full each month? Unable to see how you can begin setting aside additional money for a rainy day or ever pay off your debt in full?
It is estimated that up to 40 percent of Americans couldn’t afford a $400 emergency repair and would, therefore, be forced to borrow money or use a credit card to pay for it, according to CBS News. This is an alarming fact, considering that unemployment currently sits at record lows. According to a Federal Reserve survey nearly 20% of U.S. adults are unable to pay their bills in full every month.
The great news is that there are a variety of practical things you can start doing today to help you pay down your debt and meet your savings goals in the future. Take a closer look at good habits you can start implementing to spend better and save more today.
How Much of Your Salary Should Go to Saving?
Generally speaking, you should try to put aside at least 20% of your salary or total monthly income. Obviously, it is ideal if you save more — but not less.
In fact, we advise following the 50/30/20 rule when it comes to divesting your income; budgeting 50% of your income towards necessities/expenses, 30% towards discretionary items, and 20% towards savings.
If you are not in this ballpark, consider reassessing how your hard-earned money is spent to get you closer to the 50/30/20 rule. Or start implementing some money saving tips below.
Money Saving Tips for Basic Goods
You should prioritize spending your money on basic goods that either you cannot live without or would significantly impact your life if you were to go without them. And since spending money is inevitable, consider the following ways to ensure you are spending wisely:
- Look for deals: Whether you prefer to shop in-store or online, doesn’t really matter to us. What does matter is that you spend your money where you can get the most value for it. That said, take stock of the items that you regularly purchase and see where you can get them cheaper. Is it at the local grocery store, the wholesale store, or online? Make a grocery list specific for each store and you can likely reduce your spending drastically each month.
- Use coupons: Scour the Sunday paper, the Internet, newspaper ads and other avenues to find coupons you can use toward your next purchases.
- Smart spending: Though we all fall in love with name brand products, you would be surprised at how similar private label and generic brands are compared to name brand products, Money Crashers says. The most significant difference typically rests in the consumer’s mind. Give generic brands a try — you will save money, and we bet you won’t notice a difference.
- Set a budget: Set a budget and stay within it each time you shop. If you cannot stay within it, make sure you are spending less in another area to offset the average.
Eating Healthy While Spending Wisely
We always hear consumers stating how much more expensive it is to eat healthy food, and often times it becomes a preventative factor in them actually eating healthy.
But there is an affordable way you can eat healthy and stay within your budget. First, stop getting takeout and deliveries. These are usually unhealthy foods, and the costs can add up. In fact, a study from Business Insider states that the average American eats out 5.9 times per week!
How do you eat healthy on a budget? Plan your meals in advance, stock up on produce (hit up your local farmer’s market if you can), and do not make any impulse food purchases.
What to Do With the Money You Save?
Now that you have some additional tips to work into your lifestyle, it is time to discuss what you should be doing with the money you save. Take a look:
- Save it: try to save at least 20 percent of your income; saving money should be a priority.
- Pay off debt: Paying off debt should be another priority especially when it comes to being able to save money long-term and improving your credit score. Consider prioritizing paying off high-interest debt first, as you will save more in the long run. However, if you need quick motivation, target a smaller debt to pay off first, to see that becoming debt free is achievable.
- Have some fun: It is okay to treat yourself from time-to-time. Just make sure that you are first hitting all of your other savings goals.
There are other tips you can work into your savings plan as well. For instance, you can plan your credit card payments in a way to save more. Also, some credit cards offer reward incentives when you make purchases at certain stores or on certain websites. As you accrue reward points, you can usually use them toward purchases or even receive cashback. And there’s plenty of websites and mobile apps to save money and invest.
It Is a Matter of Choice
As is often the case with developing a savings plan, there is not one big thing that will help you reach your goals, but numerous smaller changes and practices that will add up over a week, month and year that has the biggest impact on your finances. Remember, small changes lead to big impacts!