Retailers have made it so easy to buy and receive goods at your doorstep. You can buy almost everything you need from any shop in the world with a single click on your mobile device. It seems almost impossible to save money with such convenience. Many people start well with their saving plan but fall into the temptation of impulse buying. Others think that their income is too little to save any portion every month. The truth is that saving requires discipline, a well thought out plan, and commitment. Here are some saving tips you should consider in 2017.
- Set a goal
You will fall back on your savings plan if you are not working towards any goal. Start with a specific, measurable, realistic, and time-bound goal. Determine the amount of money you need to save every month to achieve your goal. For instance, your goal can be raising the down payment for a new house within a certain period.
- Check your expenses
If you always use your full income to meet your monthly expenses, it is time to evaluate your spending. Write everything you buy if you have been working without a budget. Check the expenses that you can cut off to save money every month. For instance, you do not have to spend much on Cable TV if you rarely watch TV or have a reliable internet connection.
- Write a new budget
After evaluating your expense, draw a new budget and set new limits for your expenses. Savings should be part of your expenditure every month. Be committed to spending within your budget every month. Setting a budget helps you determine if you are living above your means. You may find that you are overspending on house rent or food, which brings us to another important tip.
- Eat at home
Most families overspend on food because of poor eating habits. You may not achieve your goal if you are always buying food from expensive restaurants. Cut off your eat-outs and start preparing your food from home. Try preparing your coffee from home as well and cutting down junk food. Such expenses seem small but they eventually add up and limit your ability to save.
- Choose the right savings account
You need a savings account to achieve your savings goal. Compare different interest rates, monthly service charges, and ATM charges before opening a new savings account. Go for the bank that offers the lowest operation charges and the highest interest rates on savings. The purpose of opening a savings account is to limit your access to the savings, especially when tempted to go beyond your budget.
- Automate your savings
Few people have the discipline required to deposit money in their savings account every month. The best approach is to automate the process. Most banks offer free services to transfer money on a specific day from your current account to your savings account. An alternative way is to request your HR to deposit part of your salary directly to your savings account.
- Change your shopping habits
One way to keep your expenses low is to change your shopping habits. Start using coupons where possible and shopping for items on sale. Consider buying from the second hand market as well to save more money. For instance, purchasing a used car is cheaper than buying a new car from the manufacturer. The used car may not be prestigious but it will serve you the same way as a new car.
- Create an emergency fund
You may get everything right and save money consistently every month. However, one emergency can force you to withdraw all your savings. Getting back on track after that is difficult. Open an emergency fund account while opening your savings account. You can divide your savings into two and deposit into the two accounts. This means that you have to reduce your expenses further to fund the two accounts.
- Utilize technology
We now have apps for everything including personal financial management. You can download and install free apps on your phone to help you budget and sell unused items in your house. Some apps help you locate the best deals in the retail shops in your area. You may require just one or two apps to keep you on track with your savings plan.
- Review your progress weekly
Set a specific day every week to review your progress in savings. Use the time to check your progress in spending within your budget and cutting your expenses. Do not be discouraged if you fail the first weeks. Continue saving and adjusting your spending until you master the discipline of saving. Remember to reward yourself when you finally achieve your goal and then set a new goal.