It is always important to be fiscally responsible with your money. To achieve good finances you’ll need to develop strategies to keep your finances in good order. By making plans and following great monetary advice, you can save money in the long term. No matter where you are in life, saving money is always a good idea. Saving can help you get out of debt, it can help you afford the things you need and want, and it can keep you financially safe and secure in the future.
The good news is that no matter what your income level is, you can start developing fiscally responsible strategies today and start to save money right now!
Become Financially Self-Aware
The first strategy to save money is to be conscious of your money. As children, money was magic. What little money you have as a child is easy to keep track of. You know the color of every penny and carefully considered each purchase. As adults, with direct-deposit and debit/credit cards, money can be easier to spend. So, the first step is to regain your fiscal intelligence, to regain that physical connection to your money.
Too many people lose track of their spending as invisible digital money goes off in all directions. This leads to overspending and straying outside of your budget. To become self-aware of your spending, try using cash for a while. Paying with cash can help you gain back that physical relationship with your funds. By doing this, you will see the physical money leaving your pocket and be able to visualize your transactions much easier.
Be Honest & Fearless
Learn that every dollar you spend is either for a need or want and learn to honestly and fearlessly distinguish between the two. For instance, a mortgage, rent, car payments, and utilities are needs. These are the bills you need to pay no matter what. A trip to the movies is a want or a luxury purchase. Going to the movies is fun to do, but not a necessity. There are a lot of luxury purchases that could be overtaking your budget. Like an addiction to buying shoes or going on too many vacations during the year.
Take a look at what you normally buy. Do shoes take precedence over some of your needs? If so, then switch your priorities to keep your money going toward the necessities in life. You can then budget for wants as you build your savings. Sometimes cutting out wants from our budget can be scary, or even take a brave amount of honesty on your part. But if it helps you save for the future and reach your financial goals, then being honest with yourself is worthwhile.
It’s Time to Budget
As you are becoming conscious of your money, your expenses, your wants, and your needs, it’s important to take a detailed look at your budget. Take a look at all of your spending and see where you can cut unnecessary expenses. Create a budget that tells you how much you can spend on both needs and wants every week or month. If you don’t know how to create a budget, research and seek professional help.
A lot of people cringe at the mention of creating a budget. But don’t think of a budget as something that will tell you how much you can’t spend, instead, turn it around and think of your budget as something to tell you how much you can spend. Making a budget doesn’t have to be a bummer, and it doesn’t have to take too much time. In fact, you can make a budget in just 4 easy steps.
Choose Free Activities
Now that you’ve taken a long hard look at your spending and created a budget you might not have enough money in the budget for fun activities. Even if you have to retrench financially, there are plenty of ways to add a little spice to your life that costs little to nothing. For example, you can go on a hike, take a stroll through the park, read a book, and hang out with friends. Instead of going out with your friends you can stay in with your friends and play board and card games for free! With a little creativity, you can find great activities that stick to your budget and help you save money.
As you work to stay conscious, keep your focus on the big picture. If you need to fix your car, focus on the car repairs and cut expenses by eating home-cooked meals, and not going out. Being fiscally responsible is all about making and prioritizing choices. If you get bogged down with the small stuff, such as eating out or shopping every day, it can be easy to blow through your essential funds. Our finances have goals just like our lives have goals. But having too many financial goals at one time can be detrimental to achieving your goals. So keep your focus on one goal at a time and you’ll be more likely to find success in attaining them.
It is always easier to budget when your friends and family are budgeting with you and helping you stay on track. Any goal is easier to accomplish with support. You also need to involve your friends in budgeting because sometimes we spend the most money when we’re out with friends. Being with friends is about spending time together, not about how much money you spend with them. Make socializing together a priority over spending too much. If your friends want to do expensive activities, don’t be afraid to hold out for an activity that fits your budget. If they are your friends, they’ll be willing to do less expensive activities to hang out with you.
Cut Recurring Expenses
There are a lot of recurring payments nowadays, especially with all the subscriptions now available. There are cable bills, cell-phone bills, gym memberships, music streaming memberships, shopping memberships at places like Costco or Amazon, and streaming subscriptions like Netflix, Hulu, and Disney plus. All of these little monthly payments can really add up. Make a list of all your monthly payments and subscriptions and try and cut out what you can. If you decide to keep cable, you might not need all of the premium channels. You might even realize you have a subscription you aren’t using that you can get rid of. Take a look at what plans you have and consider downgrading to save money! You might be surprised by how much you can save by getting rid of even small monthly bills.
Open a Savings Account
When you have a savings account, most banks will allow you to set up a percentage of your paycheck toward your savings account. As you set your account to direct deposit, delegate a certain percentage of each check to be deposited into your savings account. If you set this up as a constant, automatic payment you won’t miss the money. You’ll be surprised how fast your savings will grow.
One great recourse and tip for anyone’s finances is to have an emergency savings fund of cash available for use on a rainy day. It is always important to keep extra money for emergencies! By adding this to your budget, you won’t take a major hit during an emergency, because you have already budgeted for this.
If you learn to be mindful of your money, you won’t feel the pain of a budget. Let your new-found consciousness and confidence keep you on the path toward fiscal responsibility. Follow these steps and start to save money today!