Financially broken? Here are some methods of saving money

Life is unexpected, and the year 2020 has proved that even a fairly stable source of earning can suddenly be disrupted. Therefore, everyone should be familiar with at least a few methods of saving money. Some people may argue that they are not earning enough to be able to save. An advice for such people is to analyze their expenses. By keeping track of where your money goes, you will be able to identify the expenses you can cut down on.

Start with saving on small things

As far as the importance of different methods of saving money are concerned, people tend to think that they need to take drastic measures, and they end up becoming anxious. However, you can start small – by saving your money  on common items that may account for a minimal daily or monthly expense – but can have a significant accumulated effect.

Pack your lunch from home

If you eat out frequently, it increases your cost of living. Try to curb down on your expenses in this regard. It’s better to consume home-made lunch or dinner to keep yourself healthy. Follow this practise for a month, you will be surprised on how much you have saved at the end of the month. If you continue with this money-saving habit, you will have a good amount in your bank account by the year end.

Avoid late fees

Whether they are utility bills or your child’s tuition fee, paying them later than the due date will require you to pay an additional amount. You gain nothing besides an added expense by being lazy or delaying a payment which cannot be avoided anyways. Therefore, it is better to meet the specified deadline.

Cancel automatic subscriptions

We all have subscribed for Netflix, Amazon Prime, or other video streaming services. Besides, some of us have memberships to various clubs or fitness centres that we don’t use, but continue to pay for them. Another method of saving money could be to unsubscribe from platforms that you no longer use, so the amount saved from these monthly deductions can add up to your yearly savings.

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Pay off your debts

Debt services leave you with a significantly reduced income. Therefore, it is very important that you pay off all your debts as soon as possible, so that the amount spent on paying interest can add to your savings. It is better to start paying off loans using the debt snowball method. The Debt Snowball method suggests that you start paying off your debt with the smallest amount and then use the money which was locked in its installments to pay the next debt in ascending order.

Set a savings account and make regular deposits in it

The key is not just to set up a savings account and make a deposit in it as per your will and convenience. You need to set aside a fixed amount each month to be added to your savings regularly.  You must consider the savings deposit a liability and pay for it first. Consider that the remaining amount is the only amount you have to meet the monthly expenses. If you worry that you will keep altering the amount of savings each month, or will be unable to pay it at all, the following strategies might help you:

Visualize the results

Visualizing the assets you are saving for may prove to be a good source of motivation. For example, think about the family car you want to buy with the saved amount. This will help you in persuading yourself to use the cash in your hand, without worrying about your savings.

Sign up for auto debit

Arranging for a fixed amount or a certain percentage to be directly deposited in your savings account, will leave you with no option but to manage with the remaining amount you receive. This can be achieved either by requesting your employer to deposit a portion of your paycheck in the savings account, or by asking your bank to automatically transfer a certain amount from your salary account to your savings account at the start of each month.

There are various methods of saving money, but none of them can work until and unless you truly want to make the required adjustments –  to save enough for a secured future.

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