Today’s world is full of uncertainty and there’s nothing quite like the security of having some funds behind you for the inevitable rainy day that could be just around the corner. However, many of us struggle with money and working towards building savings can often be tricky for some individuals.
Whether it be unexpected medical bills following an accident, an unforeseen redundancy or just a sudden, larger-than-expected credit card bill, it’s always useful to have a little contingency fund stashed away for nasty surprises. Here are some ways you could make your money go further and start building some savings.
The importance of budgeting
No matter how fiscally prudent you consider yourself, everyone finds saving easier if they work to a budget. Life is full of expenses – from your rent or mortgage to car payments and utility bills – but most of these types of bills are fairly fixed and relatively regimented month to month. Sure, your heating costs might increase in the colder winter months but, if you study your previous receipts, you should be able to notice a pattern to allow you to plan ahead.
Also, it’s worth remembering, if you get stuck from time to time there is always the option to take out a short-term loan, often guaranteed against your existing belongings. For example, here’s a great article to car title loans in Wilsonville OR, which could be used to tide you over the trickier moments rather than committing to long-term borrowing.
Sort desired items into needs and wants
Most people have a long list of wants compared to what they actually need and differentiating between the two can help massively reduce your outlay and spending. Needs include things like gas, electricity, clothing, rent and food; wants cover pretty much everything else. There’s no need to overthink this one – when you go to buy something, ask yourself if you really need it and, if not, leave it until another time (it at all). It can also help sort things by your current priorities i.e. yes, you might want a holiday but could it possibly wait until next year?
Don’t spend above your pay check
It might sound obvious but people get into debt by spending more than they earn – simple. Take a moment to sit down and work out how much you get paid, when and how you use that cash. If you take a hard look at your finances, you’ll likely find areas of spending on things you simply don’t need. You should also take a moment to reflect on your here-and-now financial position – without factoring in what you might earn next week or next month.
Look at your monthly out-goings compared to the money coming in and try to envisage putting that money into envelopes, each with a specific purpose. In today’s fast-paced society, it’s the easiest thing in the world to just buy things on credit or visit the cash machine when you’re feeling short. Rather, use the same envelope theory and assign what’s left after fixed bills and expenses to you.
It can also be a good idea to set up three working bank accounts – one for bills, one for your own month-to-month use and one for savings. If you tightly regulate your spending better, you’ll be far more likely to put a little away each month.