April 20, 2024

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Saving Money for the Things You Want

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Whether you want to take your family away on a European vacation or would like to buy new furniture for your home, you are going to need quite a bit of cash to do so. But how can you raise this money without getting into debt? The following are a few ideas on how and where you can save money for those things in life you really want. 

Do a Spending Audit

The best way to get a grip on your finances is to know how much you are spending every month. Many of us sign up for services we never use, such as the gym, or we will sign up for free trials of music and entertainment apps, planning to cancel before the trial period ends but forgetting to do so. This means paying money for services we are either not using or could really do without. 

It might be painful to go through your bank statements, but the only way to see where your money goes each month is to do this. Write down everything that goes out each month and how much is coming in and compare the two. You are likely to see quite a few ways to cut down on your monthly expenditure. It might mean cancelling subscriptions or cutting back on the morning coffee on the way to work, but every little helps. 

Cut Down on Your Energy Consumption

Energy bills can eat up a lot of dollars every month, but many of us take electricity for granted and never give any consideration to the fact that we will pay less if we use less. It might even be worth installing some solar panels that can generate electricity for you. Although there is a cost involved with a solar panel system, the money you can save on your bills every month makes the initial cost worthwhile. The experts at Vivint Solar say that most solar panel systems will pay for themselves in a just a few years.Furthermore, because many companies offer payment plans, you can offset the monthly energy savings against the cost of the panels. 

Other ways to cut down on your energy bill include turning down the thermostat by between 7 and 10 degrees and switching off lights in empty rooms of the house. If you are lowering the thermostat, check that there are no drafts allowing heat to escape. You can look at ways of insulating your home such as using seal strips around windows and draft excluders under the doors. Extra insulation in the loft will also make your home warmer and save you money on your energy bills. 

Start Small

If you regularly use cash, you can put any spare change into a jar or special savings bank. You might be surprised at how quickly this will add up. If you are saving up over the course of a year, you can do the one cent challenge. This works by starting with 1 cent on day one and increasing the amount you save every day by 1 cent. On the last day of the challenge (day 365), you will need to save $3.65.Over the course of the year, you will have saved a total of $667.95. If you want to save a little bit more, you could double or treble the amount you save each day. 

The great thing about this challenge is that each day, the amount saved is quite small, although towards the end of the challenge, it can become a bit more difficult. Some people find it easier to print out a chart with the amount they need to save each day. If they have more spare change one day, they can put this away and mark off the amount that corresponds, even if that is further along in the year. 

Cook Fresh Food

It is easy to buy convenience food, but the cost soon mounts up. If you cook your own food from scratch instead of buying readymade packaged meals or going out for food, you will soon see more money in your bank account. Prepare your own lunch for work every day instead of buying a sandwich or burger and you could save over $1000 per year. Furthermore, if you plan your weekly meals before you go grocery shopping, you will know exactly what you need to buy and so will avoid spending too much and wasting food. 

Set Up a Direct Savings Transfer

It is easy to say you are going to save but when it comes to actually putting the money aside, it can be a bit more of a challenge. You might find yourself thinking that it would be better to wait until next month because your bank balance is not as high as you would like. What usually happens is that you will end up spending the money on purchases you don’t really need anyway. The best thing to do is to setup the transfer on payday so that the money is gone to your savings account before you even notice. You are more likely to leave it there and work within the constraints of the money you have left in your checking account. 

Pause Before Buying

Impulse buying is a problem for many individuals and is probably the biggest reason they never have any money left at the end of the month. Online shopping can make it even easier to quick-buy items without giving yourself time to think. If you want to avoid buying items that you could easily do without, it is good to get into the habit of taking a breather before you buy. 

So, imagine you see that new-fangled gadget that the advertiser is telling you will change your life, and you just need to have it. Take a breath and ask yourself if you really need it. Even better, try waiting for 30 days and if you still want it then go ahead and buy it. More than likely, you will have forgotten about it or concluded that it is something you can do without. At this stage, you can save that money instead.