Saving money is undeniably important for numerous reasons and it is a crucial habit that people need to incorporate into their lives. In our present day-to-day lives, saving money is key to leading a financially stable life, as it helps us enjoy greater security in life, plan both long term and short term goals, provide peace of mind and be better prepared for unexpected situations that may arise in life.
During the pandemic, it has become more important than ever to acquire savings and be prepared for what the future holds, given the extreme volatility of the situation. With increasing health concerns and with more and more people losing jobs and facing pay cuts, learning how to manage money effectively has become crucial for survival.
Tips on How to Save Money in Your Day-to-Day Life
Learning how to save money isn’t always an easy task and requires a great deal of effort. As such, we have compiled a list of tips on a few things that you could practice in your lives in order to save money and lead a more financially stable life.
Set savings goals
The first thing you need to do to get started is to create a set of savings goals for yourself. Make sure to write them down and keep them somewhere that is accessible at all times – such as your phone. You may also want to consider downloading useful savings apps which could help you out. Make sure you name your goal – decide what you want to save for, how high your goal is and how soon you want to reach it. When deciding on how much to save each month, make sure you take your regular expenses into consideration in order to ensure that you have sufficient spare cash for yourself. Setting an unattainable goal could result in you having not enough money for your other expenses and could discourage you from saving altogether. Saving 20% of your income is generally a good rule to follow and will help you save a realistic amount of money each month.
Record and analyse your expenditure
Once you have set and named your goals, the next most important thing is to track your expenditure. This will not only help you track your progress in terms of savings, it will help you get a clear idea of where exactly your money is being spent each month, thus helping you reduce any unnecessary expenses. For convenience, you can also download an expense tracking app on your phone – so that you can immediately record and enter everything you spend money on, no matter where you are. Try to categorise your expenses into separate groups such as – food, travel, utilities, entertainment, shopping, etc. At the end of the month, go through your expenses to see which category incurs the most expenses and try to find a way to cut down non-essential expenses.
Set up automatic bill payments
For your monthly bill payments, you can set up automated payment transfers that take place on a regular basis – via recurring transfers from your bank account to vendors in order to settle bills monthly. This can be a good idea for your important bill payments such as credit card bills, rent payments, debt repayment, utility payments or any other type of payments where delays could result in additional penalty fees. In addition to helping you avoid late payments and penalty fees, automated payments are extremely convenient as they take place digitally and eliminate the need for you to travel or even use your phone. It can also help maintain or even improve your credit score – which is extremely beneficial to your financial life.
Use price comparison websites
When shopping online, purchases usually take place faster since you only need a few seconds to buy anything that catches your eye. However, you may want to check whether you are getting the best deal for the item that you want to buy or whether there are other online stores where you can buy the same product at a cheaper price. Therefore, instead of buying something immediately, take a few minutes to search your product online, make a list of other places where you can buy it from and compare prices. You can take advantage of price comparison websites and apps that can help you do this in an extremely efficient manner. Once you’ve seen your options and compared prices, you are able to purchase it from a place that offers the best value.
Save on utilities
Utility bills are important payments that should be prioritised each month as they form part of your essential expenses. However, try to find ways to reduce your utility payments at home – by reducing waste and ensuring you use electricity, water and telephone in the most efficient way possible. Spend a bit of time and make sure any leaks at home are fixed – so that water is not wasted unnecessarily. Practice good habits such as switching off unwanted lights and turning off your tap while brushing your teeth, as little things like that are able to make a huge difference. You may also want to consider switching to energy-efficient light bulbs – which can help you bring down your electricity bill in the long run.
Delay your purchases
Though it is important to pay off important payments such as credit card bills and utility payments immediately, when it comes to purchasing something new, you may want to delay making your purchase for a bit and take time to think about whether you really need it or not. This practice will help you avoid impulse buying or buying something that you don’t really need in the spur of the moment. Rethink about why you are purchasing it, whether you really need it and whether it will truly benefit you years down the line. You may find that after a few days you might decide that you did not really want it and change your mind about buying it.
Cancel unnecessary subscriptions
When you track and analyse your expenses, make a list of your monthly subscription services that you pay for each month – such as any TV channel subscriptions, magazine subscriptions, newsletter subscriptions, online streaming subscriptions, etc. Run though this list and make a note of any services that you haven’t used in the last two to three months and ask yourself whether you really need it. Doing this can help you identify any unnecessary expenses that slip your mind each month and can help you save quite a bit of money in the long run.
Rethink expensive hobbies
As you go through your monthly expenses – check how much you are spending on entertainment or on your hobbies. These expenses are generally considered to be non-essential expenses so it might be a good idea to rethink how you spend your money if your hobbies are expensive or if you spend too much on entertainment. If you find that you have expensive pastimes – such as leisure shopping, overseas travel or even frequent night outs with friends – you could try to find ways to reduce how much you spend on them. Try to find other cost-effective activities that you enjoy and make good use of your time – such as gardening, jogging or blogging.
Plan your meals and make your own food
Eating out at restaurants is significantly more expensive than buying ingredients and making your own food. Thus if it can be avoided, try to prepare your own meals as much as possible and not buy or order food from outside. A good way to do this is to plan all your meals in advance and buy everything you need to prepare your meals. For example, you can maintain a chart with what you plan to have for breakfast, lunch and dinner on each day of the week – which will help you prepare your meals and prevent you from ordering an expensive meal when you feel hungry and can’t decide on what you want to eat.
Buy groceries in bulk
Buying groceries in bulk is also a great idea when you want to save money at home. By planning ahead, you can save big when you buy larger quantities of your groceries – that generally cost less. The next time you buy your toiletries or dry rations – try to buy the larger packs that could last you for a longer time. It is important that you plan this properly and figure out when your next purchase should be. You may also discover discounts and special offers on items that are sold in bulk – which is a great way to save more money.
Take advantage of loyalty programmes
Loyalty programmes are basically a way of rewarding you with special offers in return for your loyalty to the brand. If you typically prefer buying from a specific brand or store – such as a supermarket or even clothing store – it can be a good idea to find out if they have a loyalty programme that you can be a part of. By doing so, you can take advantage of cost benefits and any special offers that will help you save a bit of money.