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5 Simple Steps To Help You Save Money

It is now more important than ever to be able to stay focused on saving money in any way you can.

When it comes to budgeting and taking care of debts, sometimes the hardest thing is just getting started. Use these money saving tips to help you develop good habits and ideas to save money in your daily life.

Step one: Set a goal

Saving money and setting it aside will be easier if you have a clear goal to aim at. Ask yourself questions like, “what are you saving it for?”, “How much do I need to save?”, “How long will I need to save that much?”

Once you have a goal (or goals) in mind, it will help encourage you to start with your saving process.

Step two: Record your expenses

After setting your goal, the next step is to figure out how much you spend after all the deductions (taxes, health care, mortgage… etc.) have been subtracted. Doing this will help you know what you are spending the most money on and where it might be easiest to cut back. Once you identify the amount of money you have coming in, you can set a budget. Keep track of all your expenses, you can use your credit card or bank statements to help with this.

Step three: Make a budget

Setting yourself a budget isn’t as difficult as it sounds, once you have an idea of how much you spend in a month, it is easy to begin organizing your recorded expenses into a budget. Start by listing down your fixed and flexible expenses. Fixed expenses are basically your regular monthly bills, such as rent, mortgage, utilities, or car payments. While flexible expenses include groceries, gas, clothing, entertainment… etc. After identifying these expenses, begin to think about what you can cut back on, or cut out altogether, which mostly will be from your flexible expenses because it's unlikely to cut from your fixed expenses.

Step four: Set up a savings account

Once you have set your budget and know all your expenses, you should open a savings account.

Talk to a bank representative at your bank about opening an interest-free savings account, or you can open up a savings account at another bank that is not your main bank, so it won't be easily accessible.

It can be tempting to immediately spend some money when you get paid, to avoid this, deposit your savings into an account as soon as you get paid even before paying your bills, this will ensure you won't use your savings for unnecessary expenses.

Another option is to make the process automatic, where you would be able to direct a portion of your paycheck into your savings account every month. Talk to your employer about setting up an automatic deposit system through your bank since almost all banks offer automated transfers.

Step five: Adjusting your lifestyle habits

Eliminating some luxury expenses and adjusting eating habits are a great way to improve your financial situation, for this this won't impact your quality of life. Nowadays, most people spend much more on food than is necessary, so making the effort to eat in rather than out can save you more money than you think.

Start by cutting down on eating out and focus on cooking at least one to two meals a day or pack a lunch for work every other day can add up more money in your savings account.

Also, try to plan out your meals for the week and make a grocery list and assign one day as your grocery shopping day. Buying in bulk quantities is cheaper in the long run than buying small quantities of food.

When it comes to luxury items it's OK to spend a little money on yourself. But don't make it priority and think at least 24 hours before you buy any item you want.

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