How to Save Money: 5 Tips
We all want to save up money. Whether it's for that long-due family trip, buy the dream house, or get our children into college. However, most of us find ourselves in a situation where we have accumulated debt and think we are trapped in a paycheck-to-paycheck lifetime. If you're seeing yourself reflected in this first paragraph, not to worry, there might still be hope for you. Here are some tips on how to manage your finances and be healthier.
1. Increase your income
With these days of ever-rising costs and uncertain job security, it's no wonder that more and more people are turning to side hustles to make extra money. A side hustle is any income-producing activity you do in addition to your regular job. And the money you make can go towards your savings. It could be anything from freelancing, selling handmade crafts on Etsy, or driving for Uber. After you save some money, you can invest. You can check sites like MoneyGrower or Investing in the Web for information on brokers.
The great thing about a side hustle is that it gives you the flexibility to work when and how you want. You can choose projects that fit your skills and interests or take on clients who are a good fit for your personality. And if you ever need to take a break from your side hustle, you can always just scale back your hours or take a hiatus.
2. Make savings automatic
We all want to believe that we have tremendous willpower, but think like this: when was the last time you picked up a habit and stuck up with it? How are the yoga classes? Have you done your 20 minutes of meditation today? How about that art class? There's nothing wrong with you or me or anyone else. We are repetitive creatures, and change comes with a cost. So let's make our jobs easier. Go to your bank today and ask for a monthly automated transfer between your checkings and savings accounts. How much you deduct from your salary is up to you. Start at 5% and slowly build your way up. One easy way to invest automatically is through a robo-advisor.
3. Pack lunch
In 2020, the average household spent $2,375 on food away from home. If people started cooking their own food at home and taking it to work or school, it would have a tremendous effect on your family's overall expenses. I know it's extra work, but you can also view it as a family moment where all can collaborate towards a more stable financial future. The moments spent in the kitchen will be rewarded with those holidays you always wanted. Isn't it an excellent trade-off?
4. Delay wanted purchases by 15 days
You know that watch you saw last Tuesday, that beautiful dress that caught your eye, or even that piece of furniture that would look amazing in your living room? You can save up that money and invest it in the future you! Give yourself a cooling period of 15 days and delay all your wanted purchases (we're talking about big purchases, please keep buying food!). This way, you will find that once that dopamine levels drop, your craving will also drop, and maybe you won't feel the need to buy it anymore.
5. DIY everything
Before hiring or sub-contracting, ask yourself if your task isn't a possible DIY task. Evidently, some things can only be done by professionals. Nevertheless, sometimes we delegate simply to increase comfort and avoid wasting time. For example, you can start making creative gifts for your friends and family and spend virtually zero dollars on them. If your goal of saving money and retiring earlier is vital, think about DIY next time.
Saving money and retiring earlier seems like an impossible job nowadays. With a possible recession ahead and galloping inflation, prices are rising, but wages are not. However, it's always possible to make some changes and adapt to reach our goals.
I hope that you take something from this list and start saving today. By no means is your situation desperate, and with some adjustments, we can all reach our dreams of financial independence! Remember, tomorrow is the collective effort of today.
About the author
Rui Bouça is a freelance writer, content marketeer and SEO consultant. He just launched his newest website The Timeless Designer.