Ways to Save:
Many of us cringe when we hear the word saving. It’s a daunting task. You may think that saving sounds like a great idea, but that kind of lifestyle is for people who earn more. Maybe you think your spending is already limited to the bare essentials. If that is true, this blog post isn’t for you. However, I suspect many of you are far more capable of saving than you realize. For that group, I challenge you to look at the tips below. Try committing to one, or all of them, and watch as you unlock the full potential of your income.
Tip 1: Start Slow
As I said, saving can be a daunting task. We all have bills to pay and food to buy. However, there’s no need to jump into the deep end. Instead, start by putting away a few dollars a week. By skipping coffee one day a week, you could easily save fifteen to twenty dollars a month. I know, I know, fifteen bucks seems like nothing. However, the amount is insignificant. What matters is that, by holding off on the Frappuccino, you have just taken the first step in becoming a disciplined saver. More than anything, this is a mental battle, so start small.
Tip 2: Eat at Home
It’s no secret that eating out is expensive, really expensive. Let’s do some quick math (bear with me, I know math can be dreadful). You buy food out once a day during the workweek. Let’s be conservative with our numbers and assume that the cost of a meal is $10. By the end of a five-day workweek, you’ve spent $50. By the end of the month, you’ve spent $200.
Now, let’s look at the cost of eating at home. We’ll calculate the expense for a meal consisting of a hamburger, french fries, and a drink. This kind of meal easily exceeds our conservative $10 eating-out budget from before. However, when made at home, it could cost you as little as $4. You can find ground beef at an average of $5 per pound. Therefore, a hefty burger will cost you $2.50. A bag of hamburger buns goes for about $3.00, and you get eight of them, meaning one will cost you less than 38¢. After that, you need the french fries. You can find a 2lb (11 servings) frozen bag of fries for under $2. Per serving, that averages out to about 18¢. Then, you’ll need a drink. You could always go with some cost-effective tap water, but if soda is more your style, you can buy a 24-pack of cola for $10, each can costing 42¢. We’ll add on 50¢ for the condiments required for one burger, and there you go. Add all of those up, and you just made a $10 meal for $3.98.
Over that same month period, let’s assume that you can keep up this kind of meal pricing. Some dinners will cost more and others less, but this is doable. In one month, you will have spent $79.60 on home-cooked meals. Compare that to $200 from eating out. You just bumped up your savings by an extra $120 a month. If you have a family, these numbers multiply. Eat at home when you can.
Tip 3: Pay the Principal Down
Banks can make a lot of money. One of the ways that they do that is by charging interest on your loan. Legally, you have to be able to pay the loan off by making the minimum payments. However, this is not ideal. You might be wondering how paying more towards a loan could help you save. Well, in this scenario, spending and saving are not mutually exclusive. You can pay down the principal more quickly by putting more money into your debt. As you do this, the effect compounds, and a higher percentage of what you are paying will go towards the principal each time. Before you know it, you will pay off your loan, and you will have saved a ton in interest. If you have the ability, pay the principal down. You will save more in the long run.
Tip 4: Buy Generic
I’ll keep this one short because it’s fairly self-explanatory. Why would you spend more for the name brand when you can buy generic? If you are worried about the quality, check the ingredients list, and compare the two. Frequently you will find that the generic option is just as good for a fraction of the price.
Tip 5: Do You Want It?
This final tip can mean the difference in your saving journey. Have you ever bought something, enjoyed it for a while, and then realized it was a total waste of money? We’ve all been there. It happens, but we can reduce your chance of falling victim to buyer’s remorse. The next time you want to buy something impulsively, try writing it down and waiting a month. After that time has passed, review the list, and see if your heart is still set on that item. If it is, then you should consider buying it. If not, then you just saved yourself some money.
Conclusion:
Many of these tips are common knowledge. It doesn’t take a genius to understand that spending less allows you to save more, but there’s a reason that people circulate these tips so often. With all the busyness of life and the overwhelming nature of budgeting, sometimes we forget to go back to the basics. Saving is simple, but it isn’t always easy. So then, the challenge for you is to review these simple tips and take the plunge. Commit to one, or all of these, and take back control of your finances.
