There’s no working around it or magical solutions. It takes strong discipline and determination to save money. There are also many different strategies to save money, but here are five simple and basic ways to save:
1. Pay your debts. Start with credit cards and smaller loans. Pay your mortgage later once all other debts are paid.
2. Automatic savings deposit. Budgeting alone doesn’t work. Putting away money automatically on an account helps you save money. For example if you need to save money for a vacation or trip then set a budget for that and automatically deposit money to that account. You don’t just withdraw money from your savings account whenever you feel like. Your “savings” or “emergency money” should only be used for real “emergencies” such as job loss, medical bills, etc.
3. Review your lifestyle. Don’t be fooled by people’s appearance. Many people look rich and fabulous but are broke. Review your lifestyle. You can start by looking at your appliances, car, food, memberships, subscriptions, etc. Are you wasting food? Are you paying too much for gas in your car? Are your appliances energy efficient? Are you paying for gym membership that you rarely use? Cut costs wherever you can.
4. Invest in accounts and monetary vehicles that beat inflation. Start saving for your retirement ASAP. The sooner and younger you do it, the better. You don’t start saving for retirement when you are about to retire, and you should not count on your “emergency money” to use for retirement. Putting money into a regular savings account doesn’t help either, because the interest nowadays is too low to beat inflation. You have to put your money on investments that can beat inflation such as mutual funds, bonds, stocks, business, real estate, precious objects, etc. Although these investments are risky and volatile, the point is not to put all your eggs in one basket.
5. Have a plan. Just like anything advance planning is the key to saving money. Simple things like planning your meals, obtaining insurance, and setting financial goals are important things to consider and integrate into your lifestyle. Every dollar has to have a purpose. Regardless of whether or not it is a dollar that you want to use for unnecessary things, it still is consider a line item in your budget, and you should still set aside money for that.