Photo by Sharon McCutcheon on Unsplash
With the cost of living what it is, saving money seems more like a dream than a reality for many. Even if you do manage to squirrel away a few bucks every payday, costly emergencies can arise and wipe out any fiscal buffer you might have had. It seems like a vicious cycle that never ends.
Whether you’re a saver by nature or someone with well-meaning intentions to begin saving, the information below outlines several simple ways you can begin saving money – even during the tough times:
1. Get a Helping Hand
Rather than deplete your savings, try to ask close friends or family to borrow you the money you need to cover the cost of unexpected emergencies that may crop up. You’ll need to tread carefully as money disputes can be a source of discord. However, if you can find an acceptable arrangement, it’s a far better course than borrowing at high-interest. If this isn’t an option, low-interest small cash loans from ethical microfinance lenders can help you cover your emergency costs without breaking the bank when it’s time to pay them back.
2. Make a Budget You Can Stick To
Before any saving can commence, you need to know where your money is going. It doesn’t matter what you use to track your spending, but it needs to be something visible and transparent. In this way you can figure out where to cut costs to save the most money. Figure out a budget you can live with that allows all your expenses (and anything else you deem important) to be paid and still gives you something left over to put into a savings account.
3. Make Paying Off Credit Cards a Priority
With many credit card companies charging 20 percent or more in interest, it’s easy to see where your potential savings go if you carry a balance on even one credit card. Wherever possible, pay off any outstanding balances on your credit cards to free up that interest money for savings.
4. Open a Savings Account and Use It
If you don’t already have a savings account, open one and use it regularly. With limited access, it’s much more difficult to use the money you place in a savings account, especially if it’s a term deposit account that essentially locks your money safely away for a defined period.
To help raise the balance in your savings account, use tricks such as the “round down” method every time you check your checking account. If it has $109.76 in it when you look at it, transfer $9.76 to savings. There are plenty other savings gimmicks, so find one that works for you and run with it.
Alternately, you can set up automatic transfers from your checking account into your savings account. Scheduling a specific amount to transfer from one account to the other each payday ensures the balance in your savings account grows regularly without you having to do anything at all. You’ll be surprised by how fast your savings add up using this method.
5. Re-evaluate Your Large Expenses
Ultimately, it’s your major expenses – your mortgage and insurance premiums, for example – that can save you the most money. Consider refinancing your home loan or shop around for cheaper premiums for your home and auto insurance. The savings you’ll receive are well worth the time it takes to complete the tasks.
If you look at the big picture, it’s hard to fathom being able to save money. When you break it down into simple steps like the ones outlined above, you begin to see that it is possible to save money, even during the tough times.
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