Author Bio: Financial Wolves is a blog focused on helping you make more money to achieve financial freedom. After repaying student loans, I’ve shifted my focus to make more money from side hustles, real estate, freelancing and the online economy. Follow us on Twitter and Facebook.
9 Things that Help You Save Money and Live Better
With today’s economy, it’s easy to think that we’ll never be able to save money and live better. About 78% of all working Americans live paycheck to paycheck, making long-term financial planning quite difficult. However, if we’re smart about our purchases, it’s never too late to earn some financial security.
After all, having some money in the bank gives everyone peace of mind. You never know when it may come in handy. Consequently, we’ve come up with some tips for you to save money and live better.
Why is Saving Money Important?
Firstly, let’s understand why saving money is important. Only one in four US workers set aside some money for their savings account from their paycheck every month.
It’s understandable that when you’re worried about short-term finances, it’s tough to think about the long-term.
However, there are several reasons you should make it a priority, even if it is just $20 from your paycheck. For example, you can set up:
- A fund for emergencies (for example, if you need a medical procedure or if you suddenly lose your job)
- Security for your retirement
- Some money aside for your kids (either for their education, weddings, or inheritance)
- A plan for bigger purchases like buying a car or a house
Common Mistakes People Make with Financial Security
If it’s so important, why do so many people have problems saving money? Well, here are some of the common mistakes you may be making when it comes to your financial security:
- Overspending on unnecessary things. For example, going on vacation when you don’t have enough money to cover your expenses.
- Making too many impulse purchases. Impulse purchases are usually one-time deals such as credit card cash-back incentives. People think they’re saving money getting double cash-backs, but they’re not.
- Not planning your finances. This is when people don’t have a solid plan for saving/getting out of debt. Consequently, they don’t keep track of their expenses.
- Lastly, delaying thinking about the future. Especially if they’re young, people don’t prioritize future goals, only focusing on the short-term.
If you’re guilty of any of these, don’t worry. You’re not alone, and it’s not too late to turn your finances around.
Nine Things You Can Do to Save Money and Live Better
If you’re trying to save money and live better, you need to define what ‘live better’ means to you? Does it mean getting out of debt?
Alternatively, does it mean living more luxuriously? Think about your priorities, as this will guide you in your financial planning.
In any case, saving money starts with the basics. In essence, here are some examples you can easily incorporate into your lifestyle.
The US Bureau of Labor Statistics reports that only 32% of American households budget their spending. This is a problem because, without budgeting, you’re susceptible to overspending and impulse purchases.
With budgets, you can keep track of your purchases and designate a percentage of your income to your savings account/insurance plan.
Think about your expenses (the necessary and unnecessary), cut down what you can, and make a monthly/weekly budget accordingly.
Avoiding Paying with Credit/Debit Cards
To keep up with your savings goals, it’s better to pay with cash rather than credit cards or debit cards. If we pay in cash, we just spend what we have on hand. On the other hand, if we spend with credit cards, we can spend as much as we want.
Consequently, paying with cash restricts our spending habits. Moreover, by using credit or debit cards, we’re more likely to overdraft our accounts.
Setting Saving Goals
Thirdly, you need a solid plan. If you’re getting out of debt, buying a house, or saving for retirement, you need to set goals. According to recent studies, the percentage of US workers with saving plans decreases every year.
Alternatively, think about what you want to buy, how much it’ll cost (with interest and tax), and set aside an amount every month. Also, follow the 30-day rule. If you want to make an impulse purchase, wait 30 days. When the days are up, you still want to spend that money, go for it.
If not, let the money stay in your savings account.
Quitting Bad Habits
If you smoke or drink a lot, the costs for those habits accumulate quite a bit over time. According to a medical report, Americans spend up to $300 billion per year due to their smoking habits. This includes more than $170 billion in medical costs for conditions directly caused by smoking.
Think about how much you’re saving if you quit such nasty habits. For the average smoker, this is at least $3,000 per year.
No one wants to work all the time. We all need a break or else, we’ll perish. However, instead of spending money on vacations abroad, think of ways you can relax at home.
Instead of an airline ticket, go somewhere local.
Moreover, if you want to buy something, see if you can get it on sale or at discount shops. Also, reuse and recycle things you’re throwing out. Moreover, turn down the thermostat and switch off lights/appliances when not in use.
This is not only sustainable, but it also helps you save money.
Getting Rid of Grey Charges
Get money out of your bank rather than another. Grey charges may not seem like much, but they accumulate, putting quite a dent on your savings. When you’re looking for an ATM, prioritize your bank.
Switching to a Credit Union
If your bank fees are too expensive, consider switching to a credit union or, at least, an online bank. If you don’t know, credit union banks are non-profit organizations. You can get loans from credit union banks at low-interest rates.
In the long run, they offer more sustainable financial services than normal banks.
Maximizing Your Deductibles
If you have a set insurance plan, consider maximizing your deductibles. If you do, it’ll take more out of your monthly paycheck. However, this strategy proves very useful in the long run when we want to file a claim.
We end up saving more money, which is useful for emergencies.
Doubling Your Income
If you want to save more money fast, get a second job. It’s easy to find a few odd jobs here and there.
Also, with the advances in technology, you can pitch yourself to remote working opportunities to make money on the side. Otherwise, if you don’t want to pitch yourself to companies or work gig jobs, you can be entrepreneurial to find ways to make money online.
In that way, you can increase your household income and still manage your first job and other responsibilities.
In sum, saving money is highly important in this day and age. If you’re interested in being more financially secure, these are the first steps to take towards your goal. With these nine tips, we hope you’ll save money and live better lives. With economic uncertainties, it’s simply more sustainable to think in the long-term rather than the short-term.