Money can’t buy happiness, but it can buy stuff that can surely make you happy.
Every person has a different perspective on saving money, some like to live life in the present and some plans for the long term goals.
If you are wondering, how your colleague is able to save a lot of money and you are hardly able to save anything then its time to rethink about your strategy.
Saving money if a long term process and it required correct mindset to make it possible, let’s have a look at best advice to save more money.
Opt for minimalistic lifestyle
Are you aware of this lifestyle? Minimalistic lifestyle is all about living with less, you eliminate every unnecessary thing from your life.
The philosophy is about getting rid of excess stuff and living life based on experiences rather than materialistic possessions.
An average person is spending hundreds of dollars on things we don’t really require, eliminating the wastage of that money will surely make you more financially stable.
Start paying yourself a pocket money
Do you pay yourself pocket money? Yes we all have a monthly budget in our mind but do you follow that practically?
I used to do all the spending from the same amount but that made the tracking of expenses more difficult, so what I did? I started a new saving a/c in a local bank and start giving my self definite pocket money at the beginning of every month, this approach helped me to stop spending my saving money and it also made me save from my own pocket money.
Work on budgeting
Don’t save money after spending, instead, spend after saving.
Work on your budgeting, allocate a definite amount of money for your different requirements. I personally allocate my money like this:
- Pocket money: 15%
- Paying back debts: 30%
- Savings: 25%
- Learning: 15%
- Emergency funds: 15%
Paying debts include everything like home loan, credit card, education loan, etc, I don’t take any new debt if it goes more then 30% of my salary.
I spend 15% of the monthly salary in learning new things that can include upgrading to new skills or developing new skills, this can include Audible, Books, Guitar class, Technology courses, etc
Emergency funds don’t really need to spend every month, save them until you have an emergency.
Differentiate between assets and liabilities
Many people confuse their liabilities into an asset, possessing latest gadgets, an expensive watch or lavish car can make you look rich but they are all depreciating assets and big liability on your head.
Instead, invest in assets like the stock market, real estate etc.
Many people find it really difficult to allocate a definite saving amount every month, solution? Opt for auto debt for the saving.
Those unnecessary subscriptions are standing in your way to achieving financial stability, soo Unsubscribe every useless subscription. Even unsubscribe from the newsletters that are tempting you to buy new stuff.
Use many saving accounts
We talked about budgeting, but what if you are still using your learning money for parties? The best solution is to have multiple savings a/c and allocate funds at the beginning of the month, this will help you track your expenses in a much better way.