Saving money can be a challenge for people of all ages, especially for young adults entering the “real world” or for anyone who lives in an expensive city. Fortunately, there are a number of small steps with big impact that you can take to budget smarter. And because saving money can start at any stage in your life, and evolves over time, there’s an opportunity for everyone regardless of their current financial situation.
Step 1: Set and maintain a budget
Some people create monthly budgets, while others set limits on their weekly purchases. Since individual spending habits and expenses differ from person to person, set up a budget that makes the most sense for your lifestyle. Trying to save up for a new car? Put aside 50 percent of the cost before splurging. Planning for a baby? Consider cutting your entertainment budget in half to prepare for the new expenses. Want to create an emergency fund? Set up an automatic monthly transfer – $100 a month can quickly add up.
Creating a sensible budget and following it will open up your eyes to any wasteful spending habits that can add up over time – hint: your daily Seamless lunch orders accumulate. If you beat your budget, put the extra money into your emergency fund or treat yourself to something you’ve been wanting for ages (within reason, of course).
Step 2: Find the best deal
From clothing and groceries to plane tickets and insurance, there are always opportunities to save on a purchase. When shopping for a particular item, price comparison apps and tools, such as PriceGrabber, will ensure you’re getting the lowest price on the market. The same goes for travel – price comparison search engines such as Hipmunk and momondo make it easier than ever to save money by comparing costs of airfare and hotel bookings.
Looking beyond price comparison, when you were younger, did you ever wonder why your parents always had a grocery list? That’s because they are terrific money and timesaving tools. One of the easiest ways to save money when shopping is by knowing exactly what you need, and sticking to the list. It’s also helpful to write down which days you’ll be eating out for meals. This keeps you from wasting money on food you may not have time to cook or consume.
Step 3: Avoid impulse buys and aimless spending
More times than not, last-minute impulse buys are your saving account’s worst enemy. When it comes to day-to-day spending, here are a few do’s and don’ts to practice in order to make saving come more naturally:
- Don’t window shop: Window-shopping, whether online or in stores, is the easiest way to get sucked into impulse buys. Before checking out, think to yourself “do I actually need this?” or “will I use this regularly?” Focusing on the essentials (i.e. a winter coat) instead of items that we may want (i.e. seasonal purse purchases) is key.
- Use cash to limit spending: Unlike credit cards, taking out cash limits us to spending a smaller, specific amount. Practice using cash for more routine purchases like groceries, morning coffee runs or weekly happy hours with friends – all activities where overspending shouldn’t be an option.
- Set larger goals: Holiday sales are huge traps for splurging on typically unnecessary items for yourself. Hey, we’ve all fallen victim to Cyber Monday deals. To avoid the temptation, think about larger and more satisfying purchase goals. Saving up for a house or new car will be much more rewarding than a getting another new pair of shoes.
When it comes to cutting everyday costs, a few simple changes can go a long way. We love hearing stories about former big spenders becoming thrifty – everyone has to start somewhere. Share yours via Twitter: @HavenLifeInsure #thriftytips