It’s the holiday season again, which means spending and more spending on gifts and festivities. However, if there’s anything that the previous years have taught us, saving is a must. Most are still feeling the pandemic’s reeling effects, one of which is financial instability. Because of this, the need to save this 2022 arises.
Saving money takes time, and you never know when a catastrophic event will happen again, which is why you should start as early as now. The funds you’ll have can help sustain your daily needs if a crisis such as a pandemic happens again, and saving even a small portion every month can go a long way.
To help you get started, here are some tips you can use in your savings journey.
- Don’t let your overspending control you
Shopping is a great stress reliever, especially when you have the money for it. But, don’t let your current day’s stress control your spending. If you want to be serious with saving, it’s best to tackle the habit of overspending first. It’s okay to splurge on yourself once in a while. Just make sure not to make a habit of doing so every day.
2. Practice discipline when it comes to credit cards
Your credit card can make it easy to pay for anything, especially big-ticket items, with just one swipe. However, accumulating a considerable amount of debt makes it difficult to pay them off. Because of this, be mindful of your credit card spending. Also, remember to pay off your credit card bills on time, so you don’t have to pay too much on interest.
Credit cards can be your saving grace or worst nightmare, depending on how you use them. So, make sure to use them only on items or situations that matter.
3. Stick to a budget
Consider your past spending experiences and upcoming major life events when setting a budget. Try to select non-essential spending that you can eliminate. This way, you’ll have more money to save for when you decide to get married, have children, or whatever you have planned. You can even save up for when you want to have a home of your own.
It may be hard to do, but having a budget and sticking to it will help you in the long run. Of course, you can still buy what you want, but practice self-control and ask yourself whether it’s worth buying or something you can live without. By doing so, you can help yourself keep on track with your budget.
4. Track your spending with a budgeting app
Having a proper budgeting system can help you keep track of your spending. As you input your spending in a budgeting app, you’ll be able to see where your money goes and consider which items you can discard or not. The data you log can provide a rough projection of your expenses for the coming years and help you budget your finances in the long run.
If you’re not too keen on apps, the traditional pen and paper will suffice.
5. Make room for debt repayments
Accumulating debt is inevitable, but you have to make plans to repay them if you want financial freedom and save more. You can start paying the high-interest debt like credit cards or slowly chip away your debts by paying the small ones first.
6. Aim to save 10–15% of your income
You may want to consider saving 10–15% of your income for funds that you’ll need in the future. You can use them for retirement or emergency funds.
7. Set up an emergency account
A separate emergency fund account can be helpful in unexpected life situations. For example, having three to six months’ worth of expenses saved up can help cover the costs of unexpected job changes or house repairs after a calamity.
8. Invest in your future self
As you grow old, chances are you won’t be as fit to go to work as you once were. Because of this, you may have difficulty paying bills when you’re old and grey. But with your retirement fund, you don’t have to worry about where you’ll get the money to sustain your daily needs.
9. Invest more in financial literacy
Investing in yourself also means investing more in financial literacy. Take courses on financial literacy to learn investing best practices. Being literate financially can help you prevent bad investment and banking decisions as it helps you become more knowledgeable on details like interest rates or premiums. This can help diversify your investment portfolio and protect you from rising inflation rates.
Aside from this, try to calculate your net worth to know your financial status and see if the budget you set is realistic. Doing so can help you decide where and how much you’re willing to invest.
10. Consider having different sources of income
Having your own business aside from being employed can expand your horizons. You don’t have to start a big business from the get-go. Instead, start small and within your means. Consider having a passive income by renting out a room in your house.
However, you may not currently have the means to do so. If so, consider going for freelancing jobs. Numerous sites and companies are looking for freelancers, and you may be the right person for the job.
11. Review your subscriptions
Don’t forget to check on your subscriptions regularly. Be reminded that there are services with an auto-renew subscription function where they charge you automatically every month.
Some subscriptions may cost just a few. However, your subscriptions bill can blow up if you total them. That’s why it’s best to re-evaluate your subscriptions and cancel those that you don’t use often or at all.
12. Review your insurance
As you go through life, your needs change, and so should your insurance coverage. Insurance is an essential tool in saving to help you cover your expenses if something happens to you. That’s why it’s necessary to go back and check your insurance coverage or if your payments are in order.
13. Be conscious with your spending at home
Utility bills are the usual perpetrators that blow through your savings. Because of this, you have to be mindful of it. For example, don’t leave the water running if you aren’t using it or close the lights in the morning. You also have to be mindful of your food deliveries. Cooking your food at home is economically better than ordering take-out and paying the delivery fee—and it’s healthier, too.
Expenses at home can cost a lot, especially if you aren’t aware of how much you’re spending. So, remember to cut unnecessary costs even at home.
14. Collect vouchers, coupons, and promos
Your vouchers, coupons, and promo codes are your best friends. They can give you great discounts or a buy 1 take 1 deal— there’s no shame buying at a discounted price. You can use the money you saved from paying the full price for your savings or emergency funds. Be mindful of them and make sure to use them in every purchase you make when applicable.
15. Teach your kids financial literacy
Financial literacy is a must so you can manage your funds properly. Making your kids financially literate can help them make good purchasing decisions in the long run. Not only will they benefit from this, but so will you, as they can help you save money even in the small things, such as keeping house expenses on the low. So, start them young and help them reach financial literacy.
With the pandemic making many people financially unstable, saving money has become important more than ever.
It may seem daunting to do, but you don’t have to pressure yourself into saving a significant amount of money. Instead, you can start small by controlling your spending and keeping your expenses low.
There are numerous ways to save, and there’s no one-size-fits-all method. So, do what you can and save whatever amount— your future self will thank you for it.