It can be tough to break bad money habits, but it’s not impossible. And if you’re serious about saving money, there’s no time like the present to start making some changes for the better. Here are eight great tips to help you get started with.
1. Living Below Your Means: Improving Your Financial Situation One Step at a Time
If you want to improve your financial situation, you need to start living below your means. This simply means that you need to make a conscious effort to spend less money than you earn. One way to do this is to cut back on your expenses. You can start by cutting out unnecessary expenses like eating out or going to the movies. These aren’t really must-haves, but are more like luxuries. You don’t necessarily need to stop them entirely, but you should definitely try to find alternative, more cost-effective options.
You can also find ways to save on your regular expenses, like groceries or utilities. Another way to live below your means is to make more money. One way to do this is by actively looking for a better-paying job. You can also start a side hustle to bring in some extra income, like we talked about earlier in tip number three. There you have it, becoming financially stable and improving your finances requires some changes to your lifestyle and some sacrifices. But you can be sure that these sacrifices will be very worthwhile in the long term.
2. Make a list when you go to the grocery store, it can save you money
One way to avoid overspending on groceries is to make a list before you go to the store and stick to it. This applies if you buy your groceries online too. When you have a list, you are less likely to buy items that you don’t need. This can easily happen when you wander the aisles aimlessly and inevitably get tempted by all the sweet-looking junk food and candy.
Another benefit of making a list is that you can take the time to plan out your meals for the week, which can help you save money on groceries. And, of course, by planning out your purchases beforehand, you hope to minimize the possibility of buying too much. This can be especially applicable to fresh produce, which can go bad in a matter of days or a week or two if you buy more than you need. I’m sure we’ve all experienced having to throw away moldy bread or vegetables, which is really just money down the drain.
3. Get a side hustle: Maximize Your Earnings
Another great way of saving more money is to diversify your income by getting a side hustle. This can be something you do in your spare time, like dog walking or freelance writing, or it can be something you do during the week, like driving for Uber or delivering food. Whatever it is, the important thing is that it brings in some extra money each month.
Side hustles are a great way to make some extra cash, but they can also be a nice way to learn new skills and network with people. If you’re looking for a new challenge or want to meet new people, a side hustle is a great option. And of course, the more money you make from your side hustle, the more you’ll be able to save or reduce your debt. In the best-case scenario, your side hustle could even end up becoming your main gig, like it has for some people.
When choosing a side hustle, be sure to consider your skills and interests. Are you good at writing? Are you crafty? There are a number of side hustles that you can do from home. If you don’t have any ideas, simply ask friends and family for suggestions.
You can also do a little online research or dive into any of the many Reddit threads on the topic. Check out the link in the description for a great side hustle option as well.
4. Automate your finances: simplify your finances
When it comes to managing your money, automation can be your best friend. Automating your finances means setting up a system where regular automatic payments are made from your bank account to cover bills, savings goals, and other expenses. Automating your finances can help you stay on track with your budget, avoid late payments and the fees that come along with them, and save money on interest payments.
To get started with automating your finances, you’ll need a budget, as we spoke about in tip number six, so that you have a clear picture of your monthly incoming and outgoing funds. You can then set up automatic payments to cover your savings as well as your bills each month.
If you have trouble staying within your budget, you can also use automation to help you save money. By automatically transferring a fixed amount of money from your checking account to a savings account each month, you ensure that your savings are prioritized and avoid the temptation to spend that money on something else. This is sometimes referred to as “paying yourself first” and can be a powerful tool in helping you achieve your savings goals.
5. Create an emergency fund: protecting yourself from unexpected expenses
As the name implies, an emergency fund is a part of your budget that includes money for emergencies, such as unexpected medical bills, job loss, or car repairs. It is important to have an emergency fund in place so that you don’t have to rely on credit cards or loans when unexpected expenses arise. To create an emergency fund, set aside a certain amount of money each month until you reach your desired amount.
This is typically three to six months of your living expenses and should be placed in an account that allows you to access the money easily and use it however you want. The idea of an emergency fund is to have a buffer of money available in case something unexpected happens, such as a medical bill, house repair, or other crisis. Disasters can also derail financial plans. Destructive acts of nature, such as earthquakes or tornadoes, can create a financial crisis that’s much bigger than a typical emergency.
Hopefully, you have insurance, but there will be some time between making the claim and getting it paid by the insurance company. This is one example where your emergency fund can be invaluable in tiding you over. The term emergency can cover other eventualities as well. You may think of big crises when you hear this, like natural disasters, but an emergency could even be something small like needing a new battery for your car. Due to its unexpected nature, even a seemingly small expense like this one can seriously mess up your financial plans if you don’t have a buffer in place.
6. Make a budget and stick to it.
It sounds boring, but one of the best ways to achieve financial success is to make a budget and stick to it. When you have a budget, you know exactly how much money you have available to spend each month on groceries, bills, and other expenses. This enables you to stay within your budget, increase your savings, and avoid going into debt.
To create a budget, start by listing your monthly expenses. This includes bills, groceries, entertainment, and any other expenses you may have. Once you have a list of your expenses, subtract this from your monthly income. This will give you an idea of how much money you have left to save each month. Then, create a budget for each category of expense. Determine how much money you want to spend on groceries, entertainment, etc. and then stick to that budget. You should have some leftover money at the end of the month which can be used either for savings or to pay down debt.
7. Don’t gamble your money away: a terrible financial decision
There are countless reasons why gambling is a terrible financial decision. It may seem like a harmless way to have some fun and potentially make some money on the side, but in reality, it can become a costly habit that can quickly drain your bank account.
First and foremost, gambling is a form of entertainment that can quickly become addictive and lead to serious behavioral, not to mention financial problems. Gambling can also be very costly, with the average gambler inevitably spending more than they intended to and losing money in the process.
In addition, gambling can have a negative effect on one’s personal finances by causing them to overspend, take unnecessary risks with their money, and make poor financial decisions. For example, the thrill of seeking quick wins can lead to people investing in risky products hoping to get rich overnight. Ultimately, gambling is not a wise way to improve one’s financial situation. In fact, it is overwhelmingly more likely to do the opposite. If you want to save money and improve your finances, avoid gambling at all costs.
8. Practice delayed gratification: say goodbye to impulse purchases and hello to savings
Avoiding impulse purchases is so important to preserve your hard-earned cash. This can be difficult for some people, as it can be really tough not to buy something when it’s right in front of you and especially when it seems to be discounted. Fear of missing out on a great offer is something that marketers like to take full advantage of, and results in these tempting deals and offers. However, if you can resist the temptation, you’ll likely be surprised at how much money you can save. And the reality is that most of these seemingly limited time deals are going to still be there tomorrow and the day after that.
Don’t rush when it comes to buying things. One great way to avoid instant gratification and impulse buying is to implement a cash-only budget. This makes it easier to control your spending in total, since you’re limited to only what’s in your wallet or purse, instead of being able to swipe a credit card. And when you go out shopping, bring only a limited amount of cash with you. This will help prevent you from buying things that you don’t need. I’ve put a link in the description on how cash envelope budgets work and how you can get started with one as well, so do check it out.
Breaking bad money habits and saving money is possible with a little effort and discipline. By following these tips, you’ll be able to stay on track with your budget, avoid debt and fees, prioritize your savings, and be prepared for unexpected expenses. It may take some sacrifices and changes in your lifestyle, but the long-term financial stability and peace of mind will be worth it.