5 Tips on How to Save Money
1. Purchase quality over quantity
If you had to decide between purchasing a $10 T-shirt and a $50 T-shirt? You’d probably think that the $10 T-shirt is the better option because it’s cheaper and more reasonably priced, right? The answer is, it depends. It’s true that the $10 T-shirt is cheaper in terms of upfront cost, but what about the quality of the material and fabric? How long will it last? In my opinion, a good quality $50 T-shirt with good care will last ten times as long as most $10 T-shirts will last. The point I’m trying to make is that you should always consider the long-term cost-benefit rather than the short-term impact of your purchases. By being mindful of the long-term effects of your spending, not only will you get to enjoy the finer things in life, but you will also (hopefully) tend to take better care of them.
2. Make a budget
Making a budget can be a daunting task at first, but it gets easier once you’ve started and will ultimately help you to better understand your cash flow. Fortunately, there are many apps and spreadsheets available for you to use to track your spending. I see a lot of budget plans that track every single detail, however, making a budget doesn’t need to be too complicated. For example, you can start by creating a simple budget plan with your main source of income and expenses.
Once you’ve created a budget like the one above (Numbers App), you should have a better idea of your cash flow and a foundation that can help you to decide where you may want to reduce spending or allocate more of your funds.
3. Prepare your meals at home instead of eating out
There is a bit of a learning curve with preparing meals at home and it will probably take some time to adjust to the lifestyle. This is especially true if you are a young adult who may be busy with school or a career or family or someone who doesn’t have much experience with cooking. However, there are two reasons why I think it is worth the investment.
Health. Have you ever heard the saying, “Health is Wealth?” I believe it’s true. Fast food that you consume usually contains preservatives and chemicals that you are not aware of because most companies are not transparent on how their food is prepared and you only see the end product. When you cook at home, you know exactly which ingredients are going into your meals. You can be in control of the food that you consume. This is vitally important especially if you are looking to live a healthier lifestyle.
Accumulated Cost. Eating out can often save time and be an enjoyable experience. In fact, who doesn’t like fast and delicious food? However, when each meal could average between $10 to $20, the bills can add up very quickly especially when you are eating out two to three times a day. I would suggest learning the basics of cooking and preparing your meals at home in advance once or twice a week. This will save you time on busy days where you need to quickly grab a meal and go. If you need guidance on how to effectively prep meals, there are many videos available on youtube and blog sites that can help you with the process.
4. Cancel unused subscriptions
Gather a list of your monthly and annual subscriptions, and ask yourself how often do you actually use their service or product? It may be that you are using their service and product quite often and in that case, you might be getting your money’s worth. However, there are probably a few subscriptions in your list that you only use maybe once or twice a year. Those are the ones you should really be looking at and decide if it is worth paying for. Below are some companies or programs you may be subscribed to:
5. Start an emergency fund
One of the easiest ways you can save money is to build an emergency fund. I would suggest starting small and allocating 3% to 5% bi-weekly or monthly from your source of income and then building up as your income increases or expense decreases. I highly recommend segregating your main funds from your emergency funds to help envision the separation physically and mentally between available funds and savings funds. You can accomplish this by creating two checking accounts or one checking account and one savings account. Separating your funds can help you make the decision on whether the spending is really necessary. Do you really need to dive into your savings fund to buy those new fancy shoes you saw online or that $5 cafe latte from the coffee shop?
Conclusion
There are many money-saving tips that you can utilize. Ultimately, money-saving tips only work when the person themselves makes the decision to change their lifestyle habits in order to reach their personal financial goals.
