In these tough economic times saving money can seem like a challenge. However, you can take a few basic steps that will help you achieve this goal in a reasonable time-frame.
- Create saving targets. Begin with some goals for the short-term, which are simpler to accomplish. If you would like to buy that cool new tablet, make sure to shop around for the best price and save money to buy it in cash instead of using your credit card. For goals in the long-term, like retirement, homework should be done to determine the amount of money that you will require to have a comfortable life for a couple of decades after you retire.
- A time frame should be set. This means that your goals should be accomplished within a certain period of time. For instance, if you would like to acquire a home within four years, be certain the goal is achievable within the set time frame. This must be done in order to avoid a failure that would also discourage you later.
- Keep track of all your expenses. Savings are decided by how much is made versus how much is spent. Check all your expenses and gain more control over the amount that you spend. Financial apps like the one available at Mint.com provide an easy and effective way to set a budget and track expenses.
- Expenses should be trimmed. Personal spending records should be studied in detail for a couple of months at least. You’d be surprised by what you can find when doing such a study. Imagine having expenses for $200 a month just for your morning coffee. All aspects should be considered, like finding a cheaper home to rent, refinancing a mortgage, and your frequency of leisure activities.
- Open a savings account (and earn interest in the process). It is simpler to save money if it is kept separately from the spending portion. By having a savings account, money can easily be saved from being spent while providing some money back in interest.
- Save first before spending. Your priority should be to save money. Savings should be deposited into a separate account as soon as money is earned. A percentage of the money received should be saved on a monthly basis from your paycheck (10% is a good starting point). You may even ask your employer to subtract this amount from your paycheck and add it directly to your savings account to avoid any temptations.
- Know how much money you have available. It is truly surprising to see how many people have no idea of how much money they have in the bank. You should know at all times at least a fairly accurate amount of the total sum in your accounts, which will help you avoid any overdrawn charges. There are several web apps that can help you in this matter by pulling all your financial accounts into one place, making this important information accessible to you at all times.