How to Save Money

Intro: If you are bad with money and never seem to have any saved up in your bank accounts, then you’ve come to the right place. Follow these simple and practical steps to save money.

Step 1: To save money, set a goal. Are you saving to buy something small or something big, such as a house? Or do you just want to save for retirement? Start calculating how much money you will need for retirement or that new video game console and put a plan together.

Step 2: Once your goal is set, determine how you can meet that goal. How much money can you afford to set aside every week or month? Try to put 50 percent of your paycheck into a savings account and don’t touch that money unless you absolutely have to. Realistically, you may not be able to put more than 10 percent of each paycheck in a savings account but that is definitely better than nothing! After you determine how much money you can save every month, you can get a great idea of how long it will take to purchase the item you desire.

Step 3: Keep track of all your expenses. How many of these expenses are necessities or how many are luxuries? To adequately prepare for retirement, you must cut out some luxuries. Over 85 percent of people are not financially independent when they retire.

Step 4: Cut down on the luxuries and try to find ways to reduce necessary expenses. To cut down on luxuries, you may have to eat out less often, lose the premium channels, and cut down on impulse buying. To cut down on necessary expenses, such as gasoline, you could try car pooling more often. Get rid of that large SUV that you really don’t need. On your next car, purchase the 4 cylinder engine instead of the V6. Does anyone really need 270 horses? Turn your heat down 2 degrees in the winter and turn your air conditioning up 2 degrees in the summer. This can save you a lot of money annually.

Step 5: To save money, track your progress. If you start adding up all of the money you are saving you will feel happy and proud. You may even start to save more money.

Step 6: Cut out the credit cards! People are often so very tempted by credit cards because it allows them to purchase items which they don’t have the cash for. Paying interest on credit card purchases is a waste of money. Credit cards help people overextend themselves. Do yourself a favor and stop using your credit cards.

Step 7: Invest some of your money in bonds or mutual funds. These are great ways to earn some extra cash and prevent you from spending your hard earned savings.

Tips: To save money, don’t overestimate your income.

If you receive some extra cash such as a tax refund, put that money straight into your savings account. Just because it feels like free money doesn’t mean it is. You worked hard to earn that money and you should not blow it.

Warnings: Beware of impulse buys. Stores have special layouts and marketing strategies to get people to make impulse buys.

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