- Personal Finance
How to Save : Living Frugally and Save Money
All over the world, people are experiencing economic hardship.
All we hear in the media at the moment is that the we surpassed the economic crisis already. According to the media, there is a slight improvement in the trading and we have lesser unemployment rate. That is what the government here in the United States is trying to project also. The issue is not whether the macroeconomics (economy at the national level) is good, but in the whole, in terms of microeconomics (household economics), households earnings and savings should increase in order for the common people to experience the necessary change. The prosperity should trickle down to the household and personal level. The final test will come from the people if the news is true. The true test whether the economy is really improving is the increase in buying power and saving capacity of the people.
In a good economy people can save and at the same time attend to their basic needs like food, shelter, and they still have the leftover money for savings. The ideal situation is that whether you belong to a family unit or living in a single household unit, you can still save. Not only during harsh economic condition people need to cut back on some spending specially if wages are not increasing. Living in this tough times, we really need to save money not only for emergency purposes but for us to have something as a cushion when we experience hard times, when we lose jobs for example. And there is nothing compared to the feeling we feel that we have saved some money making us not to worry about our future. Worrying is becoming an issue, and you can avoid it if you start to plan on your future by saving money.
I would like to share to you some simple tips on how you can really save money and pay dues at the same time and not really compromising the quality of life the household members. So whether you are living alone or not, yes, you have to spend money because you are consuming, and long as we live we will be spending but it is also a must that we have savings to avoid debt.
Discipline is a virtue. If you are used to having drinks or smoking, cut back on it or else totally lose it. I did not say it is easy, but it can be done. Imagine if you smoke 20 sticks a day, that will be like an average of four to six dollars a day. I will not try to put a guilt on anybody but this is enough for a days meal of five member household in a developing country. Multiply 5 dollars a month and you can save 180 dollars a month, minimum wage per month in the Philippines where I came from. Plus it is not good for health either, so put a grip on it.
Determination is another virtue. When you decide that you are going to save , there is no turning back, just keep on going and reminding yourself about it. This will become a habit, a good habit at that.
Develop another hobby, just to while away from your old habit which makes you to spend unwisely. If you think you can enroll in gym class to while away your time to avoid spending, then feel free to do it. Sometimes when people are bored, they tend to go to the mall and just buy things which are not planned. And they will regret later on when the bill comes.
Plan on a lifestyle you want to pursue. Luxuries in life are your second priority, and that also includes vacation, cable, night life etc. I am not saying here for you to abandon the lifestyle you have, if you don’t have enough money and you are always on the negative, then, like what I always say, it is either you find another job to maintain your lifestyle, or cut back on expenses. Either way you need to save.
Forced yourself to save 10 percent of your earnings. Put it aside when you receive your paycheck. Create another account for salary checks and savings. No matter what happens (except in emergency case), don’t have withdrawals on it.
Prioritize things you cant live without like basic necessities of course like food, shelter, housing, medical, insurance etc. And if you have enough money thereafter paying for this basic necessities put a savings monthly.
Save on Utilities:
Use electricity minimally. If the weather is comfortable, don’t put on your AC or heater anymore, you will get use to it.
Put off play station, video games or computer if you are not going to use it for more than five hours.
When you wash clothes in the washing machine, put clothes with the same color together and as much as possible with the same fabric so that you will, know if you going to use the cold/cold or hot water.
Use your credit card wisely. Be aware of interest rate and pay your dues diligently. Always compute and see if you are better off saving the money or paying it in credit card specially if it is a big buy like major appliances.
Stick to a budget and don’t overspend. You can do it by monitoring your expenses and receivables.
Be wise in terms of your taxes. It is much advisable if you hire professional to file for you, because then they will surely know what are the additional expenses and deductibles which is due to you, like additional deductions for child care etc. Don’t be scared to ask about everything from the professional tax preparer.
Be wise and read all options when you choose medical and car insurance too. Compare among the companies and choose the best one suited for you.
Avoid impulse buying. Sometimes when you are sitting down, suddenly you thought of something to buy and you become obsessed in buying it, and then you just go and plunge for money. Think about it not only thrice, then compute and decide if it is alright to buy it now or just save first then buy it later.
After reading all of these, I think that many of us will say that these are all strict rules on how to save, but actually you can do it if you put in your mind and you think about the savings you can make. It is for your future anyway, so start saving now.