Do you often find yourself short on money right before your payday or even worse, in the middle of the month? Ever wonder where all that money goes or how you manage to spend so much money on practically nothing? If your answer is affirmative to any of these, maybe you will find the following tips on how to save money useful:
1) Rule no. 1: make lists for everything. They can really save you. Carry a small notebook (or your phone) with you and put down everything you spend money on; and I mean everything! Even that chocolate croissant! I know this seems tiring and time-consuming, but you won’t have to do it forever, just until you get a system going. This will help you become aware of what you spend money on (I’m sure there will be a few surprises) and it will make it easier to see where you can cut down on expenses.
2) Prioritize. You need to establish some clear priorities and always keep them in mind when you feel like spending big bucks on something you might actually not really need. Set up a few major priorities, like buying a new car or going on an expensive vacation, and manage your finances with those in mind. When you spot that sweet pair of shoes stop and think if you can really afford it without going off the main priorities track.
3) Establish amounts you can afford to spend for each area of your life. Make a list of all the things you need to purchase in a month, from day-to-day stuff like groceries & gas to bills, clothes, and larger expenses (like for a wedding or something like that). Think of an amount you can spend on each of those areas and then try to stick with it. Don’t beat yourself up if “accidents” happen and you go over the amount you had established for a certain area. Maybe you feel like splurging on dinner and that puts the food area out of balance. No problem, try to readjust and cut expenses from another area. After a month or two you will see how realistic your calculations were and readjust them if necessary.
4) Make a goal of how much you want to save. Set up an amount you want to save each month (no matter how small it is) and stick to it. Don’t touch that money. You will disappoint yourself if you do. If you can’t save money that means you’re still spending too much. Always readjust. You might not be able to save anything in the first few months, but after you get into a rhythm, I believe you will find yourself thinking twice before buying something, which will positively impact your budget on the long run. It doesn’t matter if you only save $5 at first, the amount will grow once you see which are the flaws in your spending system and you start to gradually tweak them.
5) Avoid impulse buys. Give yourself time to decide on items you want to buy. There is that saying: “Watch the pennies and the dollars will take care of themselves”. I don’t really believe in it and I don’t think it applies here. In fact, I believe it’s a rather unhealthy way of thinking. You don’t have to watch every penny – that is excessively obsessive and stressful if you ask me – but do watch your big spendings. Like that gorgeous Hermes bag you’ve spotted on sale on eBay or that beautiful painting that would just rock in your dining room (or at least it seems so in the heat of the moment). Give yourself time to cool down. At least 24-48 hours. If you’re still thinking about it after two days, if your heart still skips a beat when you see it, and you really think you can afford the splurge, then by all means go for it. Just don’t buy expensive things you might regret or not find all that useful later just based on impulse or on a sales person trying to convince you it’s like the best thing on the planet.
6) Food. Stop wasting it and keep track of how many times you go out to eat or order take-out. Do you just buy food on impulse when you’re at the supermarket thinking you’re going to use it all even though you have no idea of what you’re going to cook with it? Maybe you just think you’ll figure something out, but then you don’t feel like cooking and the food ends up spoiling in your fridge. I think most of us have been there. Saving money on food is not easy, especially if you want to eat healthy. Healthy food is usually more expensive if you go out to eat, so the solution would be to cook more at home instead of going out or ordering take-out. That’s not easy either, but here’s what you can do:
- take a few hours and make a plan with what you’re going to eat next week and only buy groceries you’re going to need for those recipes.
- organize your pantry and kitchen cabinets; if you’ve ever bought a bag of rice only to discover later that you already had one or several more stuffed somewhere at the back of your cupboard, you’ll know what I’m talking about. Organize kitchen items by categories and place them in clear containers so that you can always clearly and quickly see what items you need to buy when you go shopping.
- always make shopping lists; whenever you remember something you need to buy, write it down in your phone or a notebook, and then check your fridge and pantry before you go shopping to see what other items you might need.
Now I’m not saying you can never go out and have a nice meal – cooking all the time is definitely not fun, at least not for most people – you can go out how many times you want as long as it’s mostly programmed and you’re in control of your financial situation. Things can get out of control so fast and so easily. There will always be unexpected situations and expenses, but if you have things under control most of the time, you will be able to handle emergencies much easier. And after all, that’s part of what savings are for, right? So you can handle whatever life throws at you without getting slaughtered in the middle. I would love to hear what other tips & tricks you have for saving money, so feel free to post them below.