Practical tips to save money every month

While everyone wants to save money, most people struggle to figure out how to do it. Chances are that even if you plan to save some of your income for something important, it never happens. This is largely due to inadequate financial planning, which causes individuals to spend more than they should. You need to be aware of your income, budget, and needs to come up with a strategy that works.

How to save money more efficiently?

While there are plenty of ways to save money, here are some tips that should be easy to follow and implement:

1. Record your expenses

You can’t change your spending if you don’t know exactly what you’re spending all your money on. Try to keep a diary of your expenses and update it daily, so you know exactly where your money is going. Try to break expenses down into categories, such as groceries and other essentials, energy bills, ongoing costs like mortgages and loans, etc.

2. Create a budget

To control your spending, you must first establish a budget and have a clear idea of ​​how much you are willing to spend. Although you should set a workable budget that doesn’t require you to live a frugal lifestyle, include some portion of your income in the form of savings. Generally, saving about ten to fifteen percent of your monthly income should work.

3. Differentiate between your needs and your wants

You need to categorize your potential expenses and prioritize them. However, you must first separate your needs from your wants. For example, while groceries are essential, you can live without a big TV that you might have planned to buy soon. If you’re on a tight budget, you should definitely consider postponing luxury spending.

4. Create an automatic savings account

One of the best steps to take while trying to save money each month is to set up a savings account. Storing the money away from your main bank account would save you from making unnecessary purchases not covered by your budget. Also consider opting for automatic savings account transfers, a service that almost all banks offer.

5. Plan and limit your cash withdrawals

Withdrawing money too often, especially from ATMs, can lead to unnecessary expense in the form of user fees. Instead, plan ahead and withdraw the money you need on a weekly or bi-weekly basis. It would help you avoid ATM fees to a great extent, and every bit adds up. In case you find it difficult for you to manage all the money, you can divide and mark the money for specific purposes.

6. Reconsider your subscriptions

Quite often, individuals spend a large amount of money on memberships to gyms, Netflix, or other services, even if they don’t use them regularly. If you don’t really need a subscription, consider canceling it. You can even find cheaper or free alternatives, like sharing a Netflix account with a friend or relative. Also, it would be a good idea to cancel any automatic renewals and subscribe to these services only when you need them.

How to deal with your debts?

Individuals often struggle to save money as they have mounting debt. Especially if you have debts with high interest rates, you may want to pay them off faster to save money over time. Once you are debt free, you will have more money left from your monthly income in the form of savings. Therefore, always prioritize settling your debts while trying to save money.

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