How you can save money and be happy
“Spend not where you may save; spare not where you must spend.” – John Ray
Spending money is fun and saving is hard work. But saving money doesn’t need to be a challenging task. You shouldn’t be required to make drastic lifestyle changes or make huge compromises to save money if you want to make it a lifetime habit.
Here are a few ways that can help you to get started with saving money.
1. Create a plan and follow it through
First of all, make a financial plan that allows you to fit savings into your money management and monthly spending schedule. This will depend on your income, your monthly living expenses as well as expenditures you can do without. Map out each expense that occurs in any given month and decides on an amount that you can comfortably set aside for your savings account. It doesn’t have to be a big sum of money. It can be a small fraction of your income.
The important thing is to start building the habit of saving money. Once you are comfortable with the habit of saving money, you can easily increase the amount based on your financial condition. Hence, it is important to make a financial plan and evaluate your monthly expenses.
2. Set a financial goal
What do you want to save for? Is it for renovating your home? Buying a new car? Your child’s education? Or an emergency fund perhaps? Setting up a goal will help you with your financial planning and motivate you to save consistently over time.
Make sure your goal is a top priority so that you don’t indulge in making unnecessary purchases. Keep reminding yourself how much this goal means to you so that you can save up faster and avoid the temptation to waste money.
3. Track your spending
Track everything you spend your money on. Even the smallest purchases and expenditures matter. Throughout the month, we make several forgettable small expenses. As a result, it may seem that money just tends to disappear despite your best efforts.
Write down everything you spend your money on and don’t skip even the smallest details. This will allow you to track where and how much you are spending and help you understand which expenses are unnecessary and can be cut down.
4. Make arrangements with your bank
Talk with an executive or manager at your bank and do whatever you need to so that a fraction of your income is directly transferred to your savings account. There are systems that banks utilize to make it happen automatically.
As you will transfer only a fraction of your paycheck to your savings account, you will not need to take it out. A separate savings account can be of great help for saving money, especially in case of emergencies. So if you don’t have one already, make it happen immediately.
5. Use a good credit card
If you need to use credit to make your purchases, then choose a card that offers you enough rewards for every purchase you make. A credit card that offers points and rewards for spending can help you in making purchases through discounts, cashback, and travel rewards. So make sure you get the right credit card for you and take advantage of their reward system.
6. Live a life of comfort, not luxury
Making small changes to your current lifestyle is crucial for saving money. There are certain luxurious expenses that you can easily live without. However, if you cut out most of the things that help you and your family enjoy life and make you happy, then you won’t be able to save in the long term.
Calmly figure out what expenses you can cut out and what things you need to feel happy about.