Most people will be faced with unexpected expense or financial crisis at least once in their life. Car repair, medical bills, home repair or any other emergencies are all challenges for your wallet. Putting some money into a saving account is the best way to prevent you from getting stuck in difficult financial situation, but the process of saving can be very difficult—not hard to imagine. When you have no idea about what strategies should be implemented, saving is even more difficult. Fortunately, even the strictest budget still has the room for little wiggle. Here are seven “desperate” tips for people who desperately wants to save money but don’t quite know how to.
1. Create a budget.
Set a realistic household budget is the first step of saving money—you need to figure out where the money goes and then think about how to cut the expenses. Calculate your income and write down all the possible and fix expenses monthly such as loan payment, rent, auto insurance, etc. Additionally, get an estimate of all the variable expenses like utility payments and grocery shopping. Also, estimate the cost for dining out and entertainment. Subtract the monthly expenses, both fixed and variable, from the monthly income.
2. Decide a percentage of saving.
When you exclude all the possible expenses, you will have some money left. It is the time to decide whether to put them all in the saving account or a certain percentage. Put down the amount that you decide as the base saving amount. You aim each month is to save at least that amount.
3. Review budget and seek for cost cuts.
Review your current budget and figure out if there are places that you can cut costs from. For example, the entertainment costs are sometimes unnecessary and are good places to start with. Think about the cable television, video subscription service, and gym membership and ask yourself if you really need them. If possible, cancel some of the services and the cost cut from entertainment should be added to the monthly saving goal.
4. Figure out a way to reduce the variable costs.
The variable costs can’t be totally avoided, but can be reduced by several approaches. Going shopping on sales and using coupon at grocery stores are good ways to reduce the food cost. Turn off lights or appliances when not in use and set the air conditioner to higher temperature in summer while lower in winter are good points of saving money on energy. Keep the receipts and bills for the variable expenses and calculate how much you have saved for one month. The money saved should also be counted into your monthly saving goal.
5. Open a saving account locally.
You should open a saving account in a local bank. You just need to pay the minimum required in order to open the account.
6. Save from paycheck to paycheck.
Try to adopt the mentality of “pay yourself first”. Divide the saving goals by the number of paychecks that you receive every month to know how much should be saved from each one of them. Deposit the total amount into the saving account immediately on the payday before you have the chance to spend money. It is also a good choice to request your employer to set automatic transfers of a certain amount from each of your paycheck directly into your saving account.
*Image source: http://www.chickybus.com/2012/10/10-money-saving-travel-tips/
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