Your savings signify your income minus your expenditure. So logically, an increase in savings would require an increase in income or a decrease in expenditure. Of these two options, a decrease in expenditure seems like the controllable option. However, besides this, there are several other ways in which one can save money on a monthly basis.
Reduce Expenditure
1. Cut down on luxuries
The first thing to do to increase savings is to curb expenses. Of all your expenses, luxuries like cars, pricey restaurant meals, frequent shopping trips and gym memberships are basically wants and not needs. Cook more often, take public transport, exercise by taking a walk or going for a jog and engage in cheaper retail therapy.
2. Go green
Do your bit for the environment (and for your monthly bills) by cutting down on water and power usage. Buy equipment that uses minimal electricity and don’t keep electronics like the television and computer on standby mode. Switch off, unplug or switch on the power saver mode for all appliances when not in use. Don’t spend long hours in the shower and wash a few clothes by hand instead of using the washer and dryer. Check your phone bill regularly and look for suitable plans that will fit your requirements.
3. Create a weekly budget
Make a weekly budget for yourself and abide by it strictly. From your income, assign a specific amount for each week, making allowances for emergencies. Stop using credit cards to cut down on interest and pay by cash or debit cards wherever possible. For withdrawals, set an upper limit so you aren’t tempted to take out too much at a time. Keep a daily record of your expenses so you know exactly where you need to cut down to manage the budget for the rest of the week.
4. Set goals
If your long-term goal is to buy a house or a car, find out how much it costs and how much you’ll need to save for it. Set a realistic time frame within which you have to attain it, allowing for a little flexibility if the investment is a large amount. Setting a long term goal will help you overcome smaller challenges.
5. Pay off debt
Before you go about planning for a long-term expense, ensure you pay off all your debts. The earlier you pay them off, the lesser interest you will have to pay and the more focus you’ll be able to give to saving for your next expense.
Increase Income
A simple way to increase your savings is to increase your income. De-clutter your home by getting rid of unwanted, unused items and hold a garage sale to make some extra money. When de-cluttering, you may also find some old items that you could use around the house. This will help save on future expenses. Do this regularly so you can figure out a pattern of things that you buy and don’t use. Once you collect a decent enough sum of money, put it all in a bank account so you don’t spend it.
By saving a little money through small actions, you’ll find a whole lot of difference in your budget management. Although it may seem like you’re making a lot of compromises at first, it gets easier as you go along. The harder and longer you work towards your goal, the more benefits you’ll enjoy in the future.
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