One time or the other we always ask this question from ourselves: “How can I save more money?”
It’s actually a very good question. And I’m sure that you know a few tricks to save up on your hard-earned Benjamins as well. But you might have a hard time implementing them. Or, you might find them to be not practical. So, I have a few unique prospects that you can implement to basically cheat yourself in to saving more.
As we’re saving money with the intention of looking after our future self, the more savings the better. And also, you need to be able to compound these savings through investing. Otherwise you’d just be just losing the value of your savings due to inflation in the long run.
Additionally, in order to grow your money in a meaningful way, you need to have a substantial amount of savings. So, patience while being earnest is mandatory to reach your financial goals.
Once you have a good amount of money saved, you can invest in the Stock Market, Cryptocurrencies, Real Estate and so on. But of course, the key catalyst is in building the initial capital needed. So, let’s see how we can maximize opportunity and save as much money as possible.
Open a High-yield savings account & pay yourself first
Open a high-yield savings account preferably in another bank. Then, automate transfers in the account that you receive your monthly income straight to this new high yield account.
These accounts offer much higher interest rates. The current rates range from 4.50% APY to 5.35% APY. Which is much higher than the US savings account average of 0.46%.
Make sure that the amount you transfer is a good sum of money even if you’re not earning much. This should ideally be around 25% of your salary or monthly earnings.
So, what’s the reason for paying yourself first? This is because you will have a higher chance of saving that money if you get it off of your hands first. This means that it’s not part of your budget anymore. You have basically put it away and thrown the key. At least that is how you should think of it.
And what happens if you don’t do this and wait till the end of the month to save? Well, as you know, most of the time, you will have inadvertently spent all that is available in your account. Meaning that at the end of the month you’ll be back to zero and waiting for your next paycheck. So, if you want to save some real money, pay yourself first!
Make sure that this is a comfortable amount to you, so that you don’t go back and try to take back the money you saved towards the end of the month. And not just that, you should be strictly self-prohibitive of spending that money other than for something extremely important. No excuses whatsoever.
Have a set budget for your monthly expenses
A good way to decide how much you’re going to save via the standing order is to have a monthly budget.
Plan out all the typical expenses per month from food, clothing, rent, health, services & other bills. This amount should obviously be less than your income and optimally less than 75% of your salary.
And what if you aren’t able to put away 25% as savings? Then, you need to seriously look into ways to increase your income and cut down on unnecessary expenses. This is the best way to have more money to save for yourself.
Change jobs for a higher salary
Research shows that working in the same company makes you lose on potentially higher salaries in the long run. So, you will definitely lose money by staying at the same place for too long.
Typically, you can expect yearly increments of around 3% if you stay at that same company. So, if you feel that you’re paid less than you’re worth with your current employer, it’s time to move on.
Look for job openings at other similar or better companies and try to land your next job with a higher salary. The average increase can be anywhere from 5% to 10% or more depending on your location, job & industry.
And once you get that new job with a bump in your salary? Ideally, you should be able to keep your expenses the same or be aware of the effects of lifestyle inflation that comes with an increased income. So, keep yourself in check & be mindful to save more, in spite of earning more than before.
Find and eliminate money wasting things in your life
What are the things that are leeching money out of you right now? For example, are you paying too much for rent? Then you need to consider moving places and /or going in on a sharing basis with a roommate.
What else can be there that is making you waste money? Check for unwanted subscriptions for TV, Apps or Games that you might have forgotten about. You might be losing more money than you know from these subscriptions as they can add up to big numbers fast. And obviously, it’s just a waste to pay for something that you’re not using.
The key here is to being aware of exactly what you’re paying for and where your money is going. If you don’t need it, they you shouldn’t be paying for it.
Prepare your Meals at home and avoid wasting food
Preparing your own meals at home is not only good for your budget, but is great on your health too.
Eating from outside means that you don’t know for certain what the ingredients are, nor how the food is prepared. Plus, eating out costs at least more than double of what it would cost to cook food yourself. So, try your best to meal prep at home and you can end up saving a lot of money. And, your body & mind will be thanking you too.
Also, when purchasing food items, make sure that you check the expiry dates to be sure that there is ample time for storage. And be aware of what you have at home, so that you actually use them for meals and that they don’t go bad.
A proper weekly meal planning would be ideal to managing your expenses when it comes to food.
Create trigger events to save additional Money
A good example of a Trigger Event to save money is, every time you use your own car, you can save a certain amount of cash.
For instance, for every 10 miles you clock in on your car you can put away 1 to 10 dollars. This can be any amount that you’re comfortable with. Think of it as if you’re actually hiring your own car for a drive and that you’re paying the driver as well!
This kind of saving can go directly to any repairs or upkeep of the car itself. Or given the amount saved, can be used for any investment opportunities.
Another example would be is, each time you eat out, to save a similar or set amount of money.
These shouldn’t of course be considered a burden, but to the contrary, something positive. Because at the end of the day, you should remember that you’re are saving for no one else, but for your future self.
Only Buy Used Cars
Yes, we all like brand new things, and cars are one of them too. But, if you’re at a place in your life where buying the latest model of a car will put too much of a stress on your finances, don’t do it. Avoid the temptation at all costs even if you think that you can get it done.
Vehicles depreciate in value fast. Instead of buying the current year’s model, go for the previous model. This model would be about 4 to 5 years older. Look out for a car with the least amount of mileage clocked in for purchase. The discount you get on a 3 to 5-year-old used car would be in the range of 30% to 50%, which would be a huge bargain for you.
This means lower lease payments & more money that you can save.
Also, it’s a good practice on delayed gratification. If you really want to buy the current year’s model, just wait for 3 to 4 years. And before you know it you can get it for yourself at a great deal. Trust me, time moves fast.
The key here is to put back the idea of buying a brand-new car, even if you can afford it.
All the saving and careful investing means that one day your net worth would be at a great place. There’s no harm in spoiling yourself by buying the latest model you want at that time!
Thank yourself for the savings you made and gift yourself that brand new car once the time comes.
Buy Discounted items in Bulk
Whenever you see household items at huge discounts buy them in bulk. I often find things like Instant Coffee, Liquid Detergents & Soaps at up to 50% off at the Supermarket.
What I do is, I buy just enough products to last 2 to 3 months. This is knowing that when I see them on offer again, that I will add a few more to the collection.
Even though it’s a relatively low saving per item, when the items add up you can end up saving quite a bit of cash.
Buy Major Purchases like Expensive Electronics at Sales
If you want to buy a new Flat Screen TV, Computer, Laptop or other expensive items like that, wait for Sale season.
For example, there are huge discounts in the ballpark of 50% at sales like President’s Day, Memorial Day, Independence Day, Black Friday etc. So, a little patience can go a long way. You can see a full list of special US sales days at USA Postline.
Also, compare & research prices at different online shops to see where you can get the best deals. And look out for Monthly Payment Schemes for these products with no interest or additional fees.
Just make sure not to overdo this with several items all on Monthly Payment Schemes at the same time. As it then defeats the initial purpose of saving money. Instead, spread your purchases to every one year or so depending on the time of the Monthly Payments. E.g.: 6 months, 12 months etc.
Save more Money by using the 30-Day rule before buying something expensive
Wait for 30 days from when you get the idea of buying a certain product. And, make the decision after 30 days on whether to buy it or not. This is to keep yourself in check from any unnecessary impulse buying.
You can have different reasons for opting to buy something right now. But you might realize that you didn’t need it after all after the moment has passed away.
During the 30-day period you can compare different models and products to check prices. Also, you can check for reviews on the items you intend to buy. Weigh the pros and cons of your intended purchase and reevaluate your decision at the end of 30 days.
By that time, it’s maybe a 50/50 chance that you might actually need the product and that you will go ahead with the purchase.
If you still have enough reason to need it, go ahead and buy it. If not, well, you just saved a lot of money!
In Conclusion
In the above article I have listed money saving practices that I personally adhere by. What tips & tricks do you have that you follow to make sure that you save enough money?
Sound off in the comments section below. I would really like to know them. Cheers!
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