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Jan 28

The Ultimate guide on How to Effectively Save Money

Reading Time: 3 mins

Let’s confess; almost everyone has tried to save money at least once in their life. Some have failed but started again; others were successful right from the beginning. The ability to save money and not fall into the trap of seductive marketing campaigns has become an in-demand skill that you need to master. The recent pandemic and lockdown have certainly proved one point: you never know what tomorrow will bring, and having some financial cushion would always come in handy. Let’s learn how to save money to guarantee your peace of mind and invest in your future success.

 

1. Making Saving a Habit

Something is much easier to do when it has already formed as a habit not only in words but also in your brain. While scientists still debate, there is some consensus that the brain needs 21 days to form the necessary neural connections that sustain a habit. To do that for saving, start saving some money every day. You need to decide how much you can put aside every day, and there is no need to start aiming for significant amounts instantly. Instead, put in your jar or pink piggy a dollar or two every day. That should be the amount that you wouldn’t grieve putting aside so that you wouldn’t concentrate on that a lot.

 

2. Say “No” to Hunger Shopping

You have been in that situation for sure. You are hungry and tired after work, go grocery shopping, and suddenly you find yourself with a cart full of sweets and chips and other things that you don’t need. The reason is that the brain may not feel how much you need or can lose that sense of control when it faces the abundance of something it hasn’t been given for a while. When you are hungry and appear at a store, your brain can turn on your self-preservation instincts and grab everything available right now to prevent future crises. Hence, you need to ensure that a. You can control yourself by making a list and sticking to it if you go hungry shopping, b. You have adequately eaten before entering the sweet world of food.

 

3. Teach Yourself Financial Literacy

Knowing how to act as a financially literate person means planning and allocating your funds right. For business people, it translates into learning about the nuances and applying to professionals for tax preparation, knowing the tax breaks that their niche can be entitled to. For ordinary people, it is about separating your needs and wants and carefully thinking before buying a one-time gift or service that can’t make a long-term impact. If you buy something expensive on lease or credit, ensure it can pay back some dividends. For example, if you lease a car, you can ride others and make some side income. If you buy a better laptop, it can help you take more orders or do more work and get additional income.

 

4. Track Your Expenses

You may have heard these ideas a lot, but have you implemented it? Think about different businesses, big or small, one-person or multinational. Would they be where they are now hadn’t they done proper bookkeeping and counted every cent? Of course, not. You need to track both the sources of your monthly income and all the expenses you make. To do that by using a hard copy notebook or a budget app is entirely up to you. When you have a clear picture of all the monetary flows, both in and out, you can make better predictions for setting realistic goals. When you have such goals, it becomes easier to achieve them.

 

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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