Savings Tips To Help You Save Money
Savings Tips That Work
It Pays to Save
Too often I hear people complain, “If I only made more money, all of my problems would be solved”, but sadly, this is not usually the case. While an extra $20,000 a year might be helpful, it surely will not solve all your financial problems. As a society, we are too focused on how much we make, and often ignore the way we manage the money we have. For example, even though the average salary in the NFL is well over $1 million, 78% of NFL players report going broke, or experiencing financial stress, within two years of retirement. Generally, we spend according to how much we earn, and unless you’re bringing home more than you could possibly spend, even a generous raise won’t change this.
Though it may be easy to believe that money problems are outside of your control, this not usually the case. Improve your financial health on the salary you earn with these sound savings tips:
Pay Yourself First
Most individuals spend their wage on living expenses every month, and save what’s left, if any. Often when you use this strategy, there’s nothing left over. To be a successful saver, you need to pay yourself first. As soon as you receive a paycheck, pay yourself. Before you pay any other bills or expenses, put a percentage of your income into your savings. Most online banking systems allow you to set this up automatically. After you’ve done this, use the remainder of your wage to pay for your expenses. This is a great way to make sure you are saving a consistent amount on a regular basis.
This one tip alone is not enough; some people still struggle with saving and need help controlling financial impulses at the register.
Here’s a great article on how to save at online banks. It also explains in detail how online banking works. Check it out.
Time is Money
Your time is valuable. To save money, it is important to make good use of your time. When you are considering purchases, consider the price of time. For example, if you were planning a weekend getaway, you could either drive or fly. Let’s say it costs $200 more to fly than it does to drive but driving takes four hours longer. To make the best financial decision, turn time into money. In this case, flying would cost you $50 for every hour you save. To determine if it is worth it, ask yourself “would I accept a job that paid $50/hour to drive a car?”. If you would, the money that you save driving is worth the extra time. The same calculation can be done for much smaller purchases, like pre-cooked meals, or build-it-yourself furniture. You’d be surprised how often you buy things that aren’t worth your time.
Frame Your Purchases
At one point or another everyone finds themselves standing in a store, holding something in their hand, and asking “do I really need this?”. To make better decisions, consider framing purchases with an hourly wage. Think about how much time you’d have to spend at work in order to earn enough money to buy a certain product. If you are paid a salary, break down how much you earn a day, and then how much per hour. This is a good reference point for getting the best value when you buy. If, for example, you earned $20/hour, you would need to work 2 days to buy that great $300 jacket. By considering a purchase in terms of work, rather than a swipe of a card, it I easier to say “no” to an impulse buy.
These savings tips are a great way to begin saving more money, and to improve your financial health. To get a better picture of your finances, and to help control unnecessary spending, you should create a budget.
Thomas HHYPERLINK “https://plus.google.com/u/0/100587221947566029593?rel=author”. writes for wealthprep.ca – an online resource helping people make better financial decisions through educational tools, guides, and a network of Canadian financial advisors.