Do you know? You can become a millionaire without earning a 6 figure income. The key is saving and investing with what you earn. Keep reading this blog to know the best ideas on how to save money.
|#||Quick list of ideas on how to save money|
|1||Make a budget to save money.|
|2||Track your spending.|
|3||Live below your means.|
|4||Pay yourself first.|
|5||Ensure future income.|
|6||Create an emergency fund.|
1. Make a budget to save money
The most crucial step to save your money is to make a budget. Write down your monthly income and all the necessary expenses for the month, and never spend your money on anything that is not on your budget. By creating a budget, you are controlling your spending and reaching one step towards your financial goals.
2. Ideas for tracking your spending
Tracking your spending is also a necessary process when saving money. You need to know what you are spending and how much you are spending on everything.
When you track your spending, you can find many things like how much you are spending on clothes, food, utility bills, entertainment, and other things. Then you can cut down the unwanted stuff that you are spending money on every month, like a subscription service that you never use.
So, how can you track your spending?
You can use a diary to note down everything you spent in a day, or you can download a free money tracking app from the google play store or Apple app store.
There are so many amazing apps available to track your spending. I use an app to track my expenses. Every time I spend money on something, I will update it in the app, and at the end of the month, the app will show me detailed calculations and charts of my spendings.
3. Live below your means to save money
Living below your means is a great way to save money. When you buy any expensive clothes, watch or a gadget, ask yourself this question. Am I buying this to impress somebody? If the answer is “YES,” then Don’t buy it.
When You buy something to impress others, you waste your money because you don’t need it or manage it by buying cheaper options.
There are some exceptions, like when your profession demands it. For example, In some jobs, you can’t get clients when you wear cheap clothes, watch or shoes. So, you have to buy those expensive things but don’t make it a habit of buying only expensive things even when you don’t need them.
Finally, I want to tell you this when you buy something to impress people around you like your friends, colleagues, or neighbors. End of the day, they don’t care about what you have. Everybody cares only for them. So, stop trying to impress others and save your money.
4. Pay yourself first
Paying yourself first means setting aside a certain percentage of your monthly income for savings and investments. The general rule of thumb is to pay yourself at least 10 percent of your monthly income. If you can pay yourself more than 10 percent every month, you can do that.
Then invest that amount wisely according to your risk appetite. By investing the money, you are creating more money, and with the help of compound effect, your money would become a large sum of capital. To learn more about investing, check out sites like Investopedia and Nerdwallet.
5. Ensure Future Income
Ensuring a future Income is important because when you are old and can’t work anymore, you need an income source to live a life. So, ensuring a future income is very important.
You can do this by investing your money in a pension scheme that pays you after 60 or creating and building a business right now that provides you passive income when you are old.
Most people opt for a pension scheme because it’s easy to get started and risk-free. On the other side creating a business is not easy, and it is also not risk-free, but it pays you well than the pension scheme.
Another vital thing to note is that you don’t have to rely upon a single income source. By creating multiple income sources, you will get various incomes when you are old. Do you want to know how to create multiple income streams? Then check out my blog on the best passive income ideas.
6. Create an Emergency fund
You need to create an emergency fund to safeguard you from unfortunate events. Set aside a certain amount of money every month for the emergency fund. You should use this fund only for any unexpected sickness or financial crisis. Never touch this fund for any other reason. Creating an emergency fund creates a safety cushion to bounce back from any unexpected situations.
Conclusion of ideas on how to save money
When it comes to saving money disciple and consistency is the most important part. By following the above six ideas with disciple and consistency, you can save money and invest your money to earn more money. I hope you liked this blog about ideas on how to save money. Be sure to share this blog and leave a comment. Also, check out my other blogs.