Managing money may seem like a challenge to most people, but it doesn’t have to be as difficult as many of us think. In fact, improving your financial habits can be as easy as making some financial tweaks and learning a few simple tricks that will help you save more money each month. Let’s get started!
Track your spending
We all have our spending habits, but not all of us are aware of how much money they are spending each month. The first step towards better money management would be to start tracking your spending. Get a spending journal and make it a habit to enter all data related to your purchases, whether it is gas, coffee, groceries, or any other purchases that would otherwise feel ‘insignificant’.
For easier tracking, you want to save all the receipts. You should also rely on credit card and bank statements to come up with an accurate amount of your monthly spending. Doing so will allow you to see where you are overspending so you can adjust your actions accordingly.
Cut all the non-essentials
Speaking of overspending, it is important that you also look for ways to cut back and save more money each month. A good place to start would be to list all your essential and non-essential monthly expenses and see what you can cut back on.
Things like unused subscriptions and memberships can really add up, so make sure to cancel those. Going out and eating at a restaurant can also be expensive habits that add up in the long run, so be sure to put a limit on those as well. Also, to prevent yourself from making unnecessary splurges, give yourself a couple of days to figure out if you really want that non-essential item. You’ll be either glad you didn’t purchase it or you will realize that you really want it, in which case you can start saving up for that item.
Spend wisely when grocery shopping
Heading to the grocery store without a clear plan can easily lead to impulse purchases you might regret later. Shopping lists are a godsend in these situations as they can help you stay on top of your spending and shop smartly. Going grocery shopping when your stomach is growling is not a good idea either, so make sure you don’t head to the store when you’re hungry.
Another way to be wise when grocery shopping is to buy in bulk as it’s often cheaper, and opt for generic brands as they usually have the same ingredients list as their more expensive versions with a flashy package. However, don’t go overboard either! Purchase only those items that you’ll need for the next couple of days so that the food doesn’t go bad and you don’t waste money.
Look for complimentary extras when traveling
We all like freebies, and they can be a great way for smart spending while traveling. For instance, there are a lot of credit card luggage promotions that offer complimentary extras if you sign up for a certain credit card. These welcome bonuses can be anything from brand new luggage to free checked bags on the airline you use the most.
There are websites that allow you to compare different credit cards with free luggage so you can find the one that best suits your needs, your spending habits, and that rewards you for purchasing things you already spend on. After getting notified that you are eligible for the welcome offer, you can claim your free luggage and start jet-setting in style.
Set clear savings goals
Smart spending can be difficult when you don’t have a clear vision. When you’re unsure about what you’re saving up for, you’re actually discouraging yourself from saving, and the whole process starts to seem pointless. Short-term and long-term goals are there to help you stay on track and motivate you towards saving up for more important things in life.
Vacations, weddings, down payments on cars, and emergency funds are all good examples of short-term savings goals (1-3 years) while setting aside some money every month for early retirement, down payment on a house, or your kids’ education are long-term goals and may take four years or longer to complete. After setting clear goals, figure out how much money you’ll need to save to meet those goals and how long it will take you to get there.
Conclusion
Whether you’re on a tight budget or have deeper pockets, good financial skills are essential if you want to live more easily and stress-free. By learning how to save and manage your money better, you’ll be one step closer to achieving financial freedom – and that is something that is truly priceless.
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