In this article, you will learn and succeed in saving money the right way. Following these 11 Best Tips to Save Money could be challenging from the beginning but you need to put in the work to achieve your goals financially.
It means a lot to us that you are reading our article about how to save money. We think you’re serious about managing your own finances or personal finances.
Here are the 11 Best Tips to Save Money this year
1.) Start with Budget Planning:
The secret to financial success in general, and specifically how to start saving money, is that we MUST begin with a PLAN. Here, you will spend much of your time especially if you have a lot of things to consider. Of course, it will vary due to the fact that each family is unique in terms of expenses and other family matters, right?
When I was gathering my thoughts for this article, I came across the amazing planning quote by H. Stanley Judd:
“A good plan is like a road map: it shows the final destination and usually the best way to get there”
-H. Stanley Judd
Couldn’t agree more with H. Stanley. The quote tells us that in order for us to achieve our goal– Of Saving Money, we need to lay out the best plan ever on how we are going to manage our money properly.
For example, if you know you’re going to need to have a house or an apartment repaired in the next few months, you could start putting aside money for it. For us, we are comfortable with the envelope system and place it in a secured area say for example you have a safe box in the house.
By accurately projecting all of our financial commitments on a monthly, quarterly, and annual basis, budget planning will enable us to manage our resources as needed. After updating our simple spreadsheet with our family cash flow, we are prioritizing the below main categories:
a. Set aside 10% Tithes & Offerings for our church
b. 20% Family Savings
c. 10% Emergency Fund
The remaining 60% will now be used for other allocations such as:
a. Family Monthly Budget
b. Insurance policy
c. Entertainment
d. and other recurring bills
The above formula was influenced by the quote by Warren Buffet on saving money. As you can see we have secured our savings & emergency fund first before spending.
“Don’t save what is left after Spending, But spend what is left after savings.”
Additionally, setting Savings Goals is one of the best ways to keep ourselves motivated to save money. By doing so, you know the reason or the purpose why you’re working hard to achieve them – it could be savings goals for a vacation in Dubai with your family or a romantic dream destination on your bucket list.
Lastly, it would be a great idea if you could set it as auto-debit for your savings and emergency fund to ensure that it’s your main priority to be allocated.
Another great life hack to help you save money fast is to use Dave Ramsey’s envelope budgeting system.
I am encouraging you to apply the 11 Best Tips to Save Money to the letter to achieve best results.
2.) Always Keep track of your Spending:
“If you know where your money is going it will be easier to make changes if you need to.“
The first step to start saving money is identifying how much you spend. Keep track of all your expenses—that means everything: grocery items, cappuccino, cash tips, and recurring monthly bills.
Way back in 2017, we started a pencil-and-paper way of tracking our expenses, then upgraded to a simple spreadsheet, and to make everything handier, I decided to have a free spending tracker app so I can update things in real-time. Life in Dubai is a bit fast-paced so sometimes I lose track of other expenses; so what I did, I search in the mobile app store and found these 2 apps Mobills and Bookipi both are free but it has a pro account that will give you more features and can integrate on your bank or credit card accounts. My advice is just to maximize the free account and if you think that you really need to upgrade, then you can proceed to have the pro account.
Organizing Data:
Once you have your data, organize your expenses according to categories, such as Shopping, Grocery, Transport, Travel, Healthcare, and other categories that you see fit on your expense tracking. This is a critical key area because you may evaluate your overall expense at the end of every month and check which part or category you need to address maybe you overspent on one of the categories.
We made it a habit to ask for a receipt every time we’re shopping or buying our groceries or use bank statements to make sure we’ve included everything whenever we are recording. Additionally, asking for a copy of the receipt will allow you to check if there are any discrepancies between the items that you have just purchased.
3.) Prioritize Needs over Wants:
Separate wants from needs. Understanding this concept will allow us to determine our financial priorities. Before we buy something, we usually ask ourselves if the things we are about to purchase fall under wants or needs and/or if it’s a priority or if we can delay for the next few months.
Do you really need that latest iPhone 14 even if you still have a functional mobile? See, when money is tight it should not be spent unless absolutely necessary.
This may sound traditional but preparing a list and an approximate budget before going to your favorite store to buy your groceries is a very helpful approach to keep me from buying unnecessary stuff. Make sure to discipline yourself to stick to the plan.
Understanding Wants:
We also have to understand that “Wants” make us happy. To address that part, we have to master step 1 in terms of proper budget planning. Rhea and I decided to allocate funds for our wants because, at the end of the day, we all deserve to be happy.
If you’re in control of your budget, you’re in control of your finances.
4.) Do not Use Credit to Pay your Bills:
The basic principle in personal money management is not to spend more than what we earn.
Now, if you’re going to use credit to pay off some of your bills would mean you’re escalating your monthly payments in the future.
5.) Avoid Impulse Buying:
Be careful about spending a significant amount of money on periodic purchases, like gifts, or do not be tempted by online promos from your favorite brands, and other deals that are unnecessary.
6.) Review Recurring Subscriptions:
Cancel subscriptions and memberships you don’t use—especially if they renew automatically. It’s more cost-effective to cancel any unused or nonessential subscriptions.
7.) Understand the Cost of Eating Outside vs Preparing Homemade Recipes:
The benefits of cooking at home with your family are enormous since it strengthens family ties. Imagine how priceless the special memories you can develop or make as a family are.
Discovering local cuisines, however, offers you a unique experience, but moderation is required.
8.) Control your Electricity & Other Utility Costs:
Reduce your utility expenses as another wonderful way to save money quickly. You can find yourself pocketing quite a bit of additional money if you can lower your gas and electric bills because they make up a sizable portion of your monthly fixed costs.
When not in use, turn off the lights and the appliances. Invest in energy-saving lightbulbs.
9.) Pay Off Bad Debt:
Debt payments can put a tremendous strain on your overall spending plan.
The overall interest paid will be reduced if you can pay off high-interest debt more rapidly by making extra payments utilizing the snowball or avalanche methods. You will also be relieved of that load sooner.
10.) Consider Other Sources of Income:
It’s worthwhile to think about starting a side business if you want to significantly increase your monthly savings.
This could entail landing a few freelance jobs, doing a few nighttime shifts at a bar or restaurant after your office job, or considering a job that will allow you to work remotely.
If you’re considering a side hustle you may consider the following sites by offering the services that you are good at such as web design, graphic design, and lots of options:
- Fiverr
- Upwork
It can be especially motivating to put all of the income from your side jobs directly into your savings account if you have the means to do so. But watch out for burning out. Your emotional well-being is more significant than trying to meet any financial objectives!
11.) Evaluate Your Performance:
Every month, review your budget plan and assess your results. That will assist you in swiftly identifying and resolving issues in addition to helping you stay to your personal savings goal. You could even be motivated to find more ways to save and achieve your goals more quickly after learning how to do so.
Regularly evaluate your progress and, if required, make improvements. There are many budgeting tools available that can assist make sticking to your budget easier if this seems a little overwhelming. Now that you are equipped with these powerful concepts, we’re just thinking you might be interested in reading about how to build an Emergency Fund article that we have prepared.
Finally, to achieve an amazing result, follow the 11 Best Tips to Save Money to the letter.
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