Imagine the worst of the worst happened. You’re faced with a medical emergency that requires you to pay 3 times the amount of your bank account. Obviously, the first reaction is to panic, but the second might be to feel guilty. You’re no serial entrepreneur with loads of disposable income nor a child of a business tycoon with enough money without working a day in your life.
You’re also not a business and financial expert to know where exactly you can acquire funds when you need them.
You suddenly remembered your 3-week trip to another country, your splurge on a designer pair of shoes, or your pricey subscription to your favorite video game. When faced with a tough situation you can’t easily solve, you sometimes end up re-evaluating your decisions.
And although this is normal, the best course of action to move on from the situation is to make better decisions starting as soon as you can.
Saving money is quite a challenging thing to do, especially if you don’t feel like you earn enough yet bills keep piling up. Things that deal with finance and accounting seem to be intimidating to deal with too.
On the other hand, we have to acknowledge that things beyond our control happen and these things will challenge us further if we don’t have the resources to address them. Saving up is easier than you think if you approach it on a level you can actually do and learn on your own.
At the end of the day, saving up is not only something you do, it’s something you live by and continuously work on as circumstances change. Once you master the process of saving up, you will be able to not only understand how your money flows, but how you make decisions as well.
Learn these 5 easy ways to save money and you won’t make a bad financial decision again.
Table of Contents
Spend Less Than You Earn
This tip is pretty much self-explanatory. At a glance, it’s as simple as it looks – don’t purchase anything that is worth more than you earn. However, it’s not necessarily the easiest to do.
Walking up to furniture and appliance sales in a mall or seeing an airfare sale online are the biggest obstacles to successfully doing this. Sales and deals are what fuels people’s materialistic tendencies and are oftentimes the reason why saving money becomes harder to do.
Ultimately, an important understanding to have and always keep in mind is that sales are pretty much a scheme by brands to make you re-evaluate the purchases you did not initially think of making. Having the mindset of purchasing something solely because it’s cheaper than its actual price does not help either.
When you encounter another sale, try to ask yourself if it is something you would buy without the discount or if it is something you wanted a week or two ago. If you stopped thinking about an item after a week or two, then you might not really need it.
Take Note Of Your Expenses
Keeping tabs on your purchases is essential to understanding how to prioritize your spending. It also helps you to plan better for bigger purchases that you want so you don’t do it out of impulse.
Try to list down how much you earn every month, then identify how much you earn each day or each week. When planning to purchase, try to note how many days or weeks it would take for you to afford it. This way, you’re put in a mindset of working hard and taking the time to reach towards something you want, which gives overall satisfaction for every purchase.
Visually seeing and personally doing the math on your expenses also helps you make mindful decisions in the future. Seeing how much money you take away from yourself by buying something or how much you should work to make up for the purchase are strong drivers of self-control.
Cut Down on Leisure
Your Netflix or video game subscription, weekends going to the movies, restaurant dinners, monthly out-of-town trips and gym subscriptions you don’t even use might not be necessary anymore.
Now, this is not to say that you need to abandon things that make you happy and give you the relaxation you need from long and exhausting working hours, this just means that if you can live without it, then it’s probably time to take it out of your budget list.
Consequently, this will also allow you to discover and be creative on things you can do as alternatives; you’ll never know how fun something is until you try it out. Skip restaurant dinners and cook at home. If you live with other people, cooking can be a social activity. Learn how to cook together, share recipes, or get playful with a cook-off.
Cutting down on your expenses doesn’t mean that your quality of life will have to suffer. It only entails that you focus on the things that you ultimately need – housing, car, utilities – and then spend smarter on things you can work on.
Plan Your Financial Goals (and stick to them)
The act of planning mentally conditions you to look forward to something and this especially applies to saving money. Planning your financial goals can be short-term or long-term. It doesn’t matter much what these goals are, but what’s important is that you stick to them.
Your goals can be as simple as saving $50 a month or big as buying a house or paying off a loan. The essence of these goals is to remind you that with every penny that you save, you’re a step close to that goal.
So, write those goals down or type them on the notes app on your phone. Make it accessible so you can see it every day or when you want that extra push to work hard and save better. Tick off every goal that you accomplish.
Celebrate those accomplishments as they represent the rewards you give yourself with each effort you put into work.
Consider Investing
Investing is a smart way to earn extra money; consider them passive incomes too. And while many people gain great financial growth from investing, people see it as too good to be true. The risks easily scare them away.
The key to investing is focusing on not the amount of money you’re putting on but how and where you’re putting it. Research and being familiar with how investments work helps you to be more comfortable with the processes and confident with your choices.
Start with looking at which industries to put your money on real estate, stocks, and cryptocurrency. And then identify the risks and chances for each of them.
Philosopher Francis Bacon once said, “knowledge is power”. And with knowledge comes not only better risk assessment skills, but a well-informed and competent individual.
Key Takeaway
Saving money and becoming more financially responsible are important in today’s time. With the presence of a pandemic that poses threats to job security and economic stability, people have to rely on their own resources and skills now more than ever.
Although serious economic issues such as low wages and lack of reliable financial structures are the main proponents of financial struggles for a lot of people today, we have to start making ourselves accountable for our decisions as well.
Financial literacy is an important yet intimidating skill to learn. But, by starting with easy ways to save like spending less, cutting on budget, accounting for expenses, having financial goals, and venturing into investing, everyone will be able to handle their money more responsibly.
If you nurture financial mindfulness now, you won’t have to compare yourselves to big entrepreneurs and business experts ever again. You will get to enjoy a bright future with financial stability and self-awareness.
