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How to Save Money Wisely
How to Save Money
Savings, or saving money, refers to the process of keeping a portion of your income either in the form of cash (with no minimal interest) or the cash equivalent, such as a bank deposit (with minimal interest).
According to Investopedia, savings refer to the amount of “money that a person has left over” by subtracting their consumer spending (their total budget) from their disposable income (their total income) over a period of time.
Thus, it is a process of saving a small amount of money from your disposable income for future use rather than spending it immediately.
However, saving money is not as easy as 1-2-3 because there are a lot of things that we need to do without compromising our other needs.
So, here are 5 tips on how to save money successfully.
5 Tips on How to Save Money Successfully
1. Budgeting
One of the basic ways to save money is to create a budget plan that outlines your income and expenses, either on a daily or monthly basis.
It is very important to make an outline of your expenses so that it is easy for you to budget your income.
For example, if your monthly income is around $3000, then you need to make a budget plan for your expenses, either on a day-to-day basis or monthly.
And since your goal is to save more money, budgeting should be followed with the next tip.
2. Reduce Unnecessary Expenses
Since our goal is to save more money, we need to reduce unnecessary expenses.
So, re-check your budget plan and categorize it according to needs or wants.
For example, if you can live without those things, you can cross them out in your budget plan.
Thus, you need to check whether this product is a must-buy or not.
3. Shop Smart
After budgeting and removing unnecessary expenses, it’s time to shop for or purchase those products in your budget plan.
For you to save more money, it is wise to look for deals like buy-1-take-1 or try to compare the prices of the same products with different brands.
Also, you may try some shopping malls that offer cashback, coupons, or discounts.
Moreover, you may try to shop online since online shops offer the same products at different prices compared to physical stores.
Here, you can save energy and money on transportation, and online shops offer great deals.
Doing these will help you save more money.
4. Automate Savings
If it finds you more difficult to save money, set up an automatic transfer of a portion of your income.
Also, it is great to have an automated savings in bank because your money will surely grow even with little interest.
This way, you will be forced to save more money because it is automated or auto-deducted from your income.
5. Avoid Debts
If you want to save more money, avoid debt as a habit, such as through lending or product installments.
However, there are times that we are forced to borrow money, especially for emergency reasons.
If this happens, try to look for a lender that offers low interest.
But make sure to pay them on time or pay more quickly to void future interest (depending on the agreement).
Final thought:
And these are the 5 simple yet effective ways to save more money wisely without compromising your daily needs.