Financial freedom: 10 smart money saving strategies you need to try
Saving money doesn’t mean letting go of luxuries and happiness in life. It also doesn’t mean to cost cut many essential needs and live lie in a shrinking size. Money-saving tips can enhance life’s quality and help to achieve financial goals faster. The journey to financial freedom starts with simple money-saving tips.
Saving money gives financial security and lets you freely pursue your goals and dreams to lead a comfortable life. That way, you don’t have to be dependent on others. Having enough savings can wipe out major worries in life. You can easily plan on a vacation, think of getting married or make some beneficial investments for the future as well. Let us look into some money-saving strategies:
Track your expenses
One should have a financial goal and know when to save and how much to save. Track your daily and monthly expenses and keep a note of where you are wasting what. This way you can check for all incurred expenses and make sure your money is put on the right track. The keynote is to record every transaction you make, although it may seem irrelevant.
With whatever you save, start investing your funds into fruitful plans, schemes and policies. As they say, you will harvest what you sow. So increase your fund value and get better future returns, start to invest and patiently wait for benefits in the future. Over the period, your investment will compound and bring you close to achieving your financial goals. This develops a habit of saving further.
Use a budget-tracking app to set targets
Set a fixed target for your monthly budget by use of apps. Make sure you don’t cross that budget unless something emergency occurs. Your expenses can get leveraged but your budget tracker app will constantly force you to keep a check on it, especially when you tend to overshoot by eating entertainment and shopping. This is the best way to save money and helps you take immediate action from spending further.
Use public transport
People are buying a lot of cars these days, even bikes and scooters for their purposes or work. Instead, they should rely more on public transport to save fuel and reduce the accumulated pollution. This will save enough money that can otherwise get burdened if you have to re-fuel your vehicle or spend behind its maintenance. It is wise to carpool with friends and colleagues rather than drive on your own. Make use of shared cabs like a shuttle.
Follow the 50-30-20 rule
This rule is all about understanding your essential needs and demands so that you can be able to pay your debts and start saving. As per this rule, 50% of your monthly expenses should go to your ‘needs’, 30% can go to your ‘wants’ and the remaining 20% can be invested towards savings and investment. The 50% includes fixed expenses like rent, groceries, clothes, bills, medicines, etc. The 30% accounts for entertainment, movies, eating out or partying and the rest 20% goes into actual savings.
Cut down on impulse purchases
Sometimes our budget hits hard when we try to shop for extra items like that an outfit, or an accessory or maybe dine out when it is not necessary. Although it may seem trivial in our budget at first, it can later cause a lot of trouble at the end of the month and burn a huge hole in the money-saving plan. Therefore, one must cut down the impulse purchases done without thought.
Select a bank with good returns
Before opening a bank account for future savings, select one that offers the best savings plan, gives you a better investment plan or offers you better interest rates. Every quarter interest gets credited and some banks provide additional investment opportunities too. Make an informed selection after researching the interest rates for each of these chances. Tax deductions of up to $10,000 are available for interest on savings.
Get a cash-back credit card
It is another easy way to save money by opting for a credit card that offers cash back on every spending. The core idea is not to spend more but to make a budget of your needs properly and by the month’s end, the cashback will be credited to your savings account. Using this amount, if significant, you can later buy essentials. However, remember to pay back your credit card bills on time.
Look for ways to increase income
Besides normal earnings from a job, one can easily make money from other genuine multiple sources like investing in equity, bonds, mutual funds, debt instruments and other asset classes that can help to earn dividends, interests and make capital gains. One can put their property room on rent and it is an easy way to earn more. Another creative way is to put skills and passion to use and earn additional income.
Invest in preventive healthcare
Adopt preventive healthcare practices like adequate nutrition plans, fitness training and positive mental health to keep illness expenditure aside and also save the huge cost of hospitalization. It is very wise to purchase a medical policy for any unwanted future deadly attack of a disease that is covered under the policy. Ensure the sum assured is in proportion to the premium paid.