A list of advice to help saving your money from the very first penny.
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Unreasonable purchases exhaust any budget, big or low. You always feel short of funds, you get used to borrowing and can’t get rid of thinking “How can I save money?”
The word “economy” doesn’t mean that you’ll start living from hand to mouth, denying yourself all pleasures of life in order to collect money only for more necessary things.
No, “saving costs” means that you will learn the art of distributing your budget wisely. You’ll be able to use even a modest sum of money so that it would suffice for all your needs and even your summer vacation.
How to save money? The rule of 4 envelopes!
The most trusted way of saving money is the rule of 4 envelopes.
This is a very effective means of managing your family budget without any waste. You’ll learn to plan your future expenditures and will finally achieve your goals!
So what is this rule about?
Imagine a young couple living in their private apartment and possessing a car on loan. Their family budget constitutes 6000 dollars a month.
Let’s count the total income.
The young family’s monthly income totals $ 6000.
Let’s subtract 10 % from the total income for the investments and future financial goals.
Thus, we have $ 6000, subtract 10 % from it and deposit $ 600.
- Then we count off all future bills (monthly payments for the Internet, electricity, phone calls, utilities, loans etc).
And here comes the dessert!
The sum left must be divided between 4 envelopes.
This is the weekly budget the young family mustn’t surpass!
How to save money: planning expenditures
Provide a special notebook for your expenses. Every day write in it what you have spent, everything up to a cent.
Don’t worry, you’ll get used to that.
You’ll learn how to save money and in a course of time you’ll be excited to fill in every line of your expenses.
Psychologists insist that after this your monthly spending will decrease.
When you check your notes in a week, I guarantee, you’ll be surprised!
You’ll see how much money you’ve spent on all this cute junk (a bunch of cupcakes that’ll add inches to your waist, silly glossy mags, and a dozen-after-hundredth blouse that will simply collect dust).
Also, writing down every single expense in the note-book can prompt you to refuse from another purchase. Frequent using of that note-book can make you mad!
So, in a course of time you’ll learn to save money on useless things.
Provided, you write down EVERYTHING, up to a cent!
In a month you can analyze your results.
And… How much money did you spend on junk? Impressed? Right, it’s time to start saving!
Useful tips: How to make money?
Ways to save money
- Never go shopping without a shopping list.
Don’t purchase on loan.
It will only bring along additional expenses.
Do you need it? Use your grey matter!
Are you still asking yourself “How to save money?”
Then I advise you to avoid shopping on your pay day.
Psychologists proved that as soon as a worker gets his salary, he looks at the world through rose-colored glasses.
At this very moment he thinks himself a rich man who can afford whatever his heart desires!
Accustom yourself to paying only in cash.
Plastic cards don’t promote economical spending; we don’t consider them regular money and become wasteful.
And real, paper money is harder to spend.
If you are nuts about buying something and can’t get rid of this mania, wait till morning.
If in the morning your intentions don’t disappear, then go and buy the thing you need!
Don’t die for iPhone 6 (just because it’s cool) if your iPhone 5 functions perfectly!
Why waste money?
Never buy food when you are hungry.
Starving, you’ll buy two times more than your stomach can contain.
- Turn off the lights when you are not in the room, don’t throw away unfinished dinner.
If you haven’t made up your mind regarding your future investments, I give you a hundred percent guarantee that you’ll spend all the money you have collected.
If you have known for a long time how to spend your savings, the process of their collection will be more than successful.
On the other hand, putting money aside for no reason is not natural for people.
We have to know what we need it for.
The most effective and easy way to save money.
Write down your daily expense and multiply it by 365 days of the year.
Then multiply it by ten years. This expense can be the money spent on cigarettes, bars of chocolate, lunches in a restaurant and so on.
The cost of your daily habit will become clear as a day.
After this method I began to save money deliberately!
I remember I needed a laptop for work, but kept complaining that a quality machine would be too expensive and far beyond my budget.
I liked, however, to stop at my favorite café after work and spend $ 5 on a daily portion of aromatic cappuccino.
Later, when I got interested in the idea of saving money, I calculated how much this habit would cost me in ten years.
I was shocked. It totaled in a very indecent price.
Frankly speaking, it wasn’t the only useless habit of mine, I had a couple.
After several months of such analysis I quit complaining that I didn’t have money and determinedly began putting it aside.
To have this method work, you must remember and use it every day!
Passive income: 7 passive income ideas
There are three skills for money management:
- The ability to make money.
- The ability to save up money (your income must surpass your expenses).
- The ability to save the collected money and multiply it if possible, i.e. to invest.
But you can’t save money on…
Better spare yourself an extra stick of sausage than a useful book.
Don’t buy cheap medicine and don’t be carried away by self-treatment.
This can cause a 5-time more expensive subsequent service in the hospital.
Cosmetics and hydrating body care must be of good quality and safe for our health!
ANYONE ON EARTH can master the skills of saving money.
I was always impressed with elderly ladies who, living only on their pensions, could help their children whose income was 5 or even 10 times higher than their extremely modest retired pay!
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