10 Savings Strategies

How to Save Money Saving money is one of those tasks that's so much easier said than done. There's more to it than spending less money (although that part alone can be challenging). How much money will you save, where will you put it, and how can you make sure it stays there? Here's how to set realistic goals, keep your spending in check, and pay yourself first. [edit] StepsSet savings goals. For short-term goals, this is easy. If you want to buy a video game, find out how much it costs; if you want to buy a house, determine how much of a down payment you’ll need. For long-term goals, such as retirement, you’ll need to do a lot more planning (figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working), and you’ll also need to figure out how investments will help you achieve your goals. Kill your debt first. Simply calculating how much you spend each month on your debts will illustrate that eliminating debt is the fastest way to free up money. Once the money is freed from debt payment, it can easily be re-purposed to savings. Establish a timeframe. For example: "I want to be able to buy a house two years from today." Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. If it’s not attainable, you’ll just get discouraged. Figure out how much you’ll have to save per week, per month, or per paycheck to attain each of your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. For most savings goals, it’s best to save the same amount each period. For example, if you want to put a $20,000 down payment on a home in 36 months (three years), you’ll need to save about $550 per month every month. But if your paychecks amount to $1000, it might not be a realistic goal, so adjust your timeframe until you come up with an approachable amount. Keep a record of your expenses. What you save falls between two activities and their difference: how much you make and how much you spend. Since you have more control over how much you spend, it's wise to take a critical look at your expenses. Write down everything you spend your money on for a couple weeks or a month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc. Keep a small notebook with you at all times. Get in the habit of recording every expense and saving the receipts. Sit down once a week with your small notebook and receipts. Record your expenses in a larger notebook or a spreadsheet program. Trim your expenses. Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $300 on ice cream, $100 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with. Calculate how much those cuts will save you per year, and you'll be much more motivated to pinch pennies. Can you move to a less expensive apartment or house? Can you refinance your mortgage? Can you consolidate your debts so that you're not paying as much interest? Can you save money on gas, or give up a car altogether? If your family has multiple cars, can you bring it down to one? Can you drop a land line and only use your cell phone? Can you live without cable or satellite TV? Can you cut down on your utility bills? Can you restrict eating out? Buy food in bulk? Cook more at home? You might be able to save a lot of money on food. Reassess your savings goals. Subtract your expenses (the ones you can't live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let's say you've decided you can definitely get by on $1500 per month, and your paychecks amount to $2300 per month. That leaves you with $800 to save. If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the timeframe. Maybe you need to put off buying a new car for another year, or maybe you don’t really need a big-screen TV that badly. Make a budget. Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things. This is especially important for expenses which tend to fluctuate, or which you know you're going to have a particularly hard time restricting. (E.g. "I will only spend $30 a month on movies/chocolate/coffee/etc.") Stop using credit cards. Pay for everything with cash or money orders. Don't even use checks. It's easier to overspend when you're pulling from a bank or credit account because you don't know exactly how much is in there. If you have cash, you can see your supply running low. You can even bundle up the predetermined amount of cash allocated for each expense with a label or keep separate jars for each expense (e.g. a bundle/jar for coffee, another for gas, another for miscellaneous). As you pull money from a jar for that particular expense, you'll see how much remains and you'll also be reminded of your limit. If you need to have credit cards but you don't want the temptation of having them available to use day-to-day, restrict that section of your wallet with a note or picture reminding you of your savings goals. Remember: cards are not inherently evil; it's all about your self control. If you use them responsibly (i.e. completely pay them off every month), you can benefit from them, as some cards offer cashback on the purchases you make. If you are particularly responsible, a credit card can earn you additional money by allowing you to delay the payment of items, keeping that cash in the bank earning interest for up to an additional month. For larger bills, such as college tuition, this additional interest can add up. For example, paying a $5,000 tuition bill with a credit card will allow you to keep that $5,000 in a money market account with a 4% interest rate for an extra month, earning you $16.67 in interest. Note: this only works if you have the cash on hand to pay the bill IMMEDIATELY when due. Open an interest-bearing savings account. It’s a lot easier to keep track of your savings if you have them separate from your spending money. You can also usually get better interest on savings accounts than on checking accounts (if you get interest on your checking account at all). Consider higher-interest options such as CDs or money-market accounts for longer savings goals. Know where your money is. And how much of it, too. If you accidentally overdraw your bank account, you will incur hefty bank fees; worse yet, the place you paid with that check may slap a bounced check fee on top of that, and send the check in again, resulting in a second overdraft fee from the bank! So just a few cents missing to cover that check could result in over $100 in fees. To avoid that, you should always know how much money you've got in your account(s), so you never cut a check for more than what you have. Pay yourself first. Savings should be your priority, so don’t just say that you’ll save whatever’s left over at the end of the month. Deposit savings into an account (or your piggybank) as soon as you get paid. You can set up an automatic transfer from your checking account to your savings account. Many employers allow you to deduct savings from your paycheck. The money is directly deposited in your savings account so you never even see it on your paycheck. You can also have investments for retirement taken directly out of your pay, and the taxes may be deferred with this option. http://www.wikihow.com/Save-Money This is what I got from net a few days back when I was searching for ways and means to save money. There are more tips also in that website. Thanks for sharing that link with us. I found that too very useful.

thank you for that information icyorchid :-) with the rising prices of food and fuel, Everybody must learn to save money. I save money by cutting back on expenses and always thinking if I really need something before purchasing it. I also save a portion of my income every payday (around 10 to 20 percent). I maintain a bank account and deposit my monthly savings there every month. I also do part time jobs so I can augment my income and save more. Also, I avoid eating out as much as possible, only once in a while. Eating out can be very expensive. I wish to invest my saved money by starting a business in the future. Hope all of us will be financially independent soon

All that i can say is , it won't be easy yea ...anyway thanks for sharing yea

i think its true that you need to track your money by means of your expenditures. sometimes when we dont list down what we buy or where we spent our money on, tendency is we overspend and would just think where did our money go??! he he

My family has always lived on a budget. We always took leftovers or sandwiches to work for lunch instead of going out to eat like everyone else was doing. Those people would be broke before the end of the week and they would go around asking for money form other co-workers. You have to learn how to live on a budget and look for special deals to be able to survive and not run out of money.

also,try saving your money little by little at a bank and when it already bag, try the treasury bills or mutual funds.

I've always tracked our spending using a program like Microsoft money. At the beginning of the year, we really struggled with creating a new budget that would allow us to save more. It was so frustrating because we couldn't figure out how much to cut eating out and what was a good grocery budget and what a pain it was going to be to monitor each area of the budget. Finally, we just made it simple and set a spending limit for each month. At the start of the month I enter all the set payments like the mortgage, car payment and utilities and then track everything else that we spend as the month goes by. We're three months into the year and we've spent 52% less than we did during the first 3 months of last year. We haven't noticed any change in our lifestyle - we're even adding on to our house and this is incorporated into the budget. It's leaving much more for us to save and I'd say it's definitely proof that you can live better on less.