- Personal Finance
How to Better Save Money -- Seven Great Ways That Work
The wise man says "It's not how much you make, but how much you save that's going to determine your financial success in this life." I know times are very tough, but you have to try your best to find different ways to save! If you are struggling to make ends meet with your current monthly(4wkly or 2bi-wkly) salary, can you imagine when you are retired, do you think you will be able to live off your fixed monthly pension, which is going to be just a fraction of your current monthly salary?
Believe me, I know that the average American is having a rather hard time saving in these tough times we are currently experiencing. However, with a little suggestion, maybe they could come to realize that they aren't doing the things that are needed to be done in order to have a little leftover for rainy days.
Realizing that many people don't know how to save, I have decided to use this hub just to share 7 tips on ways to save.
1.The first thing to remember, is that you know exactly how much money you have been making on a monthly basis. However, if you tend to spend more than your net income, this is certainly not a good situation for you, because essentially, what you might be unconsciously doing, is using your credit card or borrowing money for this extra spending. This will only cause you to create more debts! This is why it's important for you create a simple budget so that you can keep track of your monthly spending.
2.Write down how much is being spent on mortgage or rent, utilities, food, debts, gas or transportation, entertainment and so on. In this way, you can see exactly where your money is going. This can help you to decide where to make cuts, keep spending under control or find extra cash to save.
3.Determine how much of this extra cash you can comfortably save each month. Put aside a few spare dollars into your saving account or a retirement plan, like a 401k. You can have this deducted from your pay, pretax (i.e. this amount will be tax free). Many people continue to fail, simply because they aim too high. It's better to start off with a small amount and then stick with this manageable amount religiously.
4.Tell yourself that you will never spend a dime until after you have paid yourself first ( i.e. after putting your monthly savings aside). Remember, with the exception of emergencies and basic necessities, of course, there is absolutely no expenditure that is more important than savings.
5.Don't procrastinate, start now. If you don't have a saving plan in place, the sooner you begin one the better.
6.Don't confuse savings with investments. Be sure to maintain a clear separation between the two:
While investments inevitably expose your capital to some degree of risk, savings are designed to protect your capital. Investments can be in the form of stocks, stock mutual funds, or real estate, which can rise or fall in value. Savings should be limited to vehicles that rarely, if ever experience a reduction in value. The return of your money is prioritize over the return on your money.
With investments, it often makes sense to time the market. Contrarily, with savings, it doesn't, although key strategic changes may be required to adapt to a major cyclical or historical change in the economy, such as a recession or a major economic downturn.
7.You can have your pay directly deposited into your bank account(through your employer's direct deposit or with a recurring transfer with your bank), if you are not discipline enough to curtail your spending habits, once you have hard cash in your hands. Presently, with interest rates being so low, it seems as if most banks are charging more for fees than what they are offering for interests on savings.
For this reason, I think it's better to join a credit union and have your salary directly deposited into your account. Most credit unions are offering a better deal when it comes to interest on savings, especially when it comes to money-market accounts, and certificates of deposits(CDs). Also, you don't have to worry about Credit Unions investing your money on Wall Street, because they don't. In fact, they are nonprofit companies.
Although I have provided you with a few tips on ways to save, you should also do your own research. Before you join any credit union for example, please make sure you compare the current interest rates and saving vehicles of your current bank with those of any credit union you might be interested in joining. To find a credit union nearby, you can go to www.findacreditunion.com.
Copyright (C) I. Mcfarlane 20012