10 tips on how to save money (with videos)
How to save money? I suppose this question is topical during the time when the world is still experiences consequences of financial crisis. However, crisis or booming economy we definitely need to learn how to save our money. I know that it is much more pleasant to make more money than save it and I quite agree that if we had to choose which process is better most would probably agree that learning how to make money is much better than learning how to save it. However, there are different periods in life and you do not know in what situation you will find yourself in the future. I am with all I am for positive attitude and I do expect all the best for my future, but it is really wise to set aside some money in good times, so that you might have it in bad times. In the age of consumerism, when we are encouraged to spend money it is really difficult to think of the ways how to save it. Saving money looks like something old fashioned, illogical and even crazy. Why save money? If you work you can go to a bank and get a credit card for the thing you want now. And you will have it tomorrow. So, why save money, when you can always borrow and use it for you needs. Yes, you can, but borrowed money will never be yours. You should not forget that you borrow other people’s money, but you have to give back your own, the money which you earned by going to work five or more days a week. The money that you save will always be yours. So, here are some of ideas on how to save money.
Do not do something which costs money if you can do it another way
This is a rule number one in your learning of how to save money. All other rules and tips originate from this rule. There are so many things which we use and they take away money from us. We can cut on the usage of those things and in some cases we might even stop doing some practices at all. I would mention some of those activities in the hub, but I would like you to sit down and try to make a list of those things yourself. Not everything that is good for me will be good for you and others. You will have to make your own list.
1. Decide how much you need to use your car.
Car consumes a lot of our resources. In terms of consumption it can actually be considered as a member of our family, because we pay a lot of money for petrol. Very often we can cut on these expenses as we like going by car everywhere, even to the places that we can go on foot. So, before going somewhere, think, whether you can walk there and if you can I would advise you to do it. At the end of the month you will be surprised to find out how much money you have saved.
2. Reduce your eating out times.
Food is another thing that we spend our money on a daily basis. If we are thrifty we will be able to save up on it a lot. We like eating delicious food. However, this like of ours costs a lot of money. If we were able to cut our eating out times fifty percent, who knows maybe it will amount to one hundred dollars per month or even more. With this amount you can do something: pay for your utilities, cover some part of your credit card or simply invest.
3. Cut on the amount you spend for entertainment.
How we enjoy movies, going to concerts, visiting various shows and etc! I hope you do not enjoy the prices and leaving money for those things so much. Of course you don’t. That is another sphere where we can rob ourselves a little bit of the pleasure for the sake of saving up. I do not mean you have to cut it all, but what if you reduced by fifty percent as I offered you to do with eating out? More money would be saved.
4. Get rid of bad habits.
This is bad news for smokers and alcohol lovers. I do not mean to say that you should stop using alcohol at all, but if that is your weak spot I would recommend announcing ‘war’ on those habits as your priority aim. I know that there are better reasons for quitting these things, but saving money is also a very good motive. If you smoke or drink, just sit down and calculate how much these habits cost you. I think you would be able to adopt a child and support it with the money that you would save by quitting ‘the things’. Maybe I am a little exaggerating, but I have done the calculations and I see that I am very close to the truth with the argument.
5. Sell things you do not need.
A lot of people have become 'collectors' of things. They do not need them, but they still have them for some ‘unknown and mysterious’ purposes. Just by staying in your drawers things continue losing their value. Why not get rid of them? Maybe you will be able to buy something more useful from the money that you get or cover some of your debts. This will also make you think whether you really need to buy things that you buy. It’s all about money management! Learn to be a good steward of your money and you will save some money every month.
Make a budget and follow your expenses
- Calculate all of your income.
It includes your salary, money that you get through other activities like investing, renting, free lance jobs, occasional works and etc. You have to know how much you have so that you would never spend more than you get. If nations of the world followed the principle they would never have deficits in their budgets. How do they look now? Awful! I hope you do not want to follow their example.
2. Calculate how much money you spend in a month.
After you know how much you make, you need to calculate how much money you are used to spending. This helps you to see where you can cut on spending and make sure that things like utilities, rent, education and other things would be paid for. This will also help you to find out which activities need less money.
3. Make a special ‘rainy day fund’.
In case you
lose your job and do not have steady income, you would be able to survive at
least a few months. Maybe till you get social benefits or find another job. Some people have not lost their jobs and houses just because they had this special 'rainy day fund'.
Get rid of your debts
- Try to get rid of the smallest debts first. This would allow you to save up just a little and think where you can put your saved money.
- Get rid of your credit cards. If you have more than one, try to do it bit by bit. Sometimes things do not happen fast and we need patience.
- If you are able to pay off your house and a car, do it. If you have two cars, you might consider giving one back to the bank.
Most investors concentrate on long term results and so should you. You do not have to worry about the amount. I have read a lot of books who were written by investors that made millions and most of them started investing from a few hundred bucks or even less. So, you can start doing that any time.
Tips how to invest:
- Follow the principle of ‘buy low, sell high’. Look at an early chart of a security you want to invest and decide whether the price you see at the time is right for you. All profitable investors buy low and sell high. The best time to buy is after a security has been falling for some time and then stays for a few months at the same level. This may not be the final bottom, but you will never be able to predict that and if you invest long term you will be sure that the price of the security will come back one day.
- Buy commodities. Commodities unlike stocks of companies will never go bankrupt (people will always use gold, silver, sugar, soybeans, copper and etc.) However, you should follow the first principle before purchasing any commodity.
- Determine how much you can lose. Investing is risky, because you can never be sure if you win this or that time. . So, never lose more than you can afford.
4. Never borrow money to invest. Statistics show that most people actually lose money when they borrow to invest. You should learn to start investing with the capital that you have, not with the capital you do not have.
Open a savings account and buy government bonds
1. Choose the bank that offers the highest interest for your savings, but do not put all of your money into one bank. Choose a few banks and divide your money between two or three banks.
2. Buy government bonds. You should discuss the issue with your broker. Try to ask as many questions about various bonds as possible. Then decide for yourself.
Positive aspects of saving money
Saving money develops your character
If you learn how to save money you also develop yourself as a person. I primarily mean that you exercise self control and this character feature is very useful. It saves you from a variety of evils that people get into because of their greed, impatience, laziness and other negative character features. If a child learns how to save money from early days I can assure you that he will learn how to use money prudently as well. The majority of people do not know how to do it, or rather they do not want to do it, because they are used to spending money on useless stuff. In fact, some of them even do not feel able to do it, because of their habit of wasting money. Whenever they get a salary there is one outcome: money is gone in a few days. I do not think we can praise this kind of feature.
When you learn how to save money you will feel financial security
Saving money helps you to feel financially secure, because you know that you have something stored for rainy days and that will be available when those days come. It also builds your self confidence because you know that even if something happens to your savings you know how to deal with money and will be able to cope with any financial difficulty that may appear on your path. I hope the hub was useful and you know more on how to save money.
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