Whether you want to save money for retirement, to open your own business, to buy a home, or any other reason, you have to figure out where that extra money’s going to come from. In order to build up your savings, you need to take control of your finances and make some smart decisions that will lead you on the path to wealth.
Cut Your Monthly Costs
This is the most immediate and easiest way to get your savings going, and yet for many people, it’s also the most difficult. To start, look through your monthly bills and see what you can cut. Chances are, you’re paying for some services you don’t even use or need, like a gym membership, premium channels, food that just gets thrown in the trash, or a home kept a toasty 70 degrees around the clock. Once you’ve taken inventory of all your expenses, you’ll be able to immediately cut out anything that isn’t consistently useful and necessary.
Cheap Equivalents
To help further decrease your expenditures, begin substituting expensive habits for more frugal ones. Instead of buying Starbucks and meals from a restaurant daily, make coffee and lunch at home. Rather than go to dinner and the movies, make a nice meal and some popcorn, turn off the lights, and put on a movie from Netflix that you haven’t seen. Go to the library and borrow books instead of buying them. They’re minor changes, but they will allow you to save a big chunk of cash, and you’ll quickly find your pockets fuller, your body healthier, and your house cleaner than they ever were when you were a stereotypical consumer.
Increase Your Paycheck
While cutting costs is a great way to improve your savings, it’s also important to note that your expenses can only drop so low before you run out of things to stop spending money on. However, there’s no end to the amount you can save if you increase the money coming in. The first and best way to increase your take-home pay is to simply ask for a raise. You may not get one, but it can’t hurt to ask.
If you can’t get a raise or increase your hours at your day-job, you can still get more money coming in each month through side-jobs. Sell your excess stuff online, start your own website, or get creative and use your unique talents to make you some extra cash. There are hundreds of ways to make money, and not all of them have to be a chore. You may even find yourself enjoying it so much that you turn your side-hustle into a full-time career.
Put Your Portfolio to Work
You shouldn’t be the only one working to grow your savings; you need to put your savings to work, too. If you’re money’s sitting in a bank earning less than 1% interest, you’re not even keeping up with inflation and are actually losing money every year. Instead, put your money into a variety of investments, ideally with a mix of safe and risky investments spread into several different investment types to help you get a good amount back without risking losing it all. If you’re unfamiliar with investing, it may be good to speak to a financial advisor and see what options are available to you. Just make sure that the advisor is not commission-based, or they may push you into saving vehicles that aren’t necessarily right for you.
If you are serious about wanting to save money, there are many ways to make it happen. Cut your costs, increase your income, and get your extra cash working, and you’ll quickly find yourself with the savings you need to help you meet your goals.
– Staci Roman writes articles about personal wealth for finance blogs. Are you financially ready to buy a house, send a child to college or retire? At McKinley Plowman Accountants they can formulate a financial plan to help you achieve those goals. Check out their site at www.mckinleyplowman.com.au.
