In this day and age, the rise of inflation in all aspects of our lives makes the need to save our money even more crucial. If you are finding that at the moment you don’t know which way you are going when it comes to tracking your finances, don’t panic.
Everyone experiences issues from time to time with their money, and especially during the holiday season, it can definitely be stressful. Get Christmas out of the way first, but start making your preparations to start a clean slate in 2018 and really put your budgeting skills to good use. New Years Resolutions anyone?
Set Realistic Goals
Before you begin on your money saving journey, you must first bear in mind that you only have one pair of hands, and you can only do so much. Understanding the way budgeting works and saving money take time to adapt to, so don’t expect yourself to be able to save up half of your earnings right away.
Start off with small goals, if you get paid weekly, try and place $20 into a savings account each week. It might not sound like a lot, but if you did that every week for a year, you’ll have saved up $1040! If you find after a few months that you could easily save $40 per week, up your savings until you feel that you are saving a sufficient amount each week.
Stay With The Parents
This, of course, applies more to students and twentysomethings. But although you might want to get out of your parents’ house and find your own way in the world, it is better for you to try and stay as long as you can. Avoid the urge to go out and rent something, and instead stay at home and save up for a mortgage. In the long run, it will save you money and mean that you get yourself on the property ladder when you can afford it.
DIY EVERY. THING.
Well, not necessarily every single thing, but try and make as many things as you can rather than buy them from the store. If you take a look at Pinterest and look for home crafts and DIY projects, you’ll be faced with thousands of creative and fun ideas that you can do at home with the kids this weekend.
Earn More Than You Spend
It might sound obvious, but you really need to make the conscious effort to look at your finances each month and think about what the necessities are, where you can scrimp on things, and where you don’t need to spend money at all.
Make a Budget
In order to save money and spend less than you earn, you will have to learn how to budget yourself. For the first month, don’t change anything about your habits- but write down every single penny you spend against what you have coming in.
Look at the prices of bills, insurance, the mortgage and all necessary costs, and take those away from the total you earned. What’s left should be divided into things like food, fuel, and savings.
Look at your food bills. Are there any ways you can make food shopping cheaper? How about cooking two or three large batches of food for the week rather than eating something different each day? You’ll save money on the ingredients and have much less waste at the end of the week. You can find some great cheap family meals here: https://www.bbcgoodfood.com/recipes/collection/cheap-family-suppers
Track Your Spending
Use a website such as personalfinance-online.com to help you track every aspect of your finances if you struggle to do it yourself. A site like this will tell you what you earn, what you spend and what you save. You’ll be able to play around with the figures and aim to save more.
Open a Savings Account
If you don’t already have a separate account for savings, you need to open one up. Having a separate place to put the money you save means that you are less likely to notice it and spend it. ‘Out of sight, out of mind’…
Putting your money somewhere else will mean that you only have the money in your current account to look at. It will psychologically make you save without even noticing it.
Free money is obviously more of an expression than a literal statement, but it is essentially any money that your employer puts into your retirement account. With most accounts, when you put a percentage of your wages into your retirement fund, your employer has an obligation to match the percentage you put in, as well as even add an extra amount on top of that. It means that as you are saving up for your retirement, most of the money you have in the fund is ‘free’.
Invest In The Stock Market
When you hear the words stock market, you probably picture very angry business people shoving each other and shouting in front of big screens. And while that is the atmosphere of the stock market, you don’t need to let out your pent up aggression on others in order to invest in a company.
The stock market works by people buying shares in companies. This could be a small independent retailer or a huge multinational corporation such as Google or Apple. The idea behind buying a share in the business is holding onto it until the share prices rise, and then selling it off for a profit.
For example, let’s say you bought a share worth $50 from Apple. You will wait and watch the stock prices rise and fall for weeks, or even months. Then Apple suddenly releases the new iPhone 8 and iPhone X, and customers all over the world go crazy for the new additions to the Apple family. This results in your share value rising to $120. If you sell your share now, you will make a profit of $70 for the investment you made.
Investing is a risk, however, if you have the funds to do it, it can be a lucrative source of extra income for you and your family.
Insurance is a key building block for the brick wall which protects you against losing everything you hold dear. It is required by law when you buy a car that you insure it for damage, that when you buy a home you have house insurance for the building and contents, and you must even insure yourself if you go on vacation to cover any medical bills if you get sick. Insurance is a comfort blanket which shields us from harsh losses, which is why investing in life insurance and health insurance can also be a great advantage to you and the people you love in the long term.
If for example, you were ever to be in a fatal accident, your family would have to be able to make up the mortgage payments in your absence. However, if you take out life insurance, you’ll pay a small amount each month, and if anything ever does happen to you, your family will have the security and be able to grieve without worrying about finances. Being smart with money isn’t just about the short term, you must also think ahead as well.
If you have a smartphone, tablet, and laptop, you already have the perfect tools to help you with your finances and budgeting. There are tons of budgeting apps which you can use to track your income and expenses. Technology is the best friend of the modern worker, and you can take the time to really delve into your finances and maybe even shop around for a better deal on your energy bills using a comparison site.