Reading about others who work so hard and save their money, can inspired you to be smarter about your own finances. The inspiration can encourage you to live frugal and save money to invest in, for instance, retirement savings accounts, emergency funds and other investment accounts.
You be able to do it by learning from other people, reading financial books and through trial and error. The following are the most important tips that can increase your saving rate:
Keep Your Expenses Lower
You can live frugally and keep your expenses as low as possible by:
- Moving closer to work: By relocating near your work place, you wouldn’t have to spend a lot of money on transportation.
- Packing lunch: Eating out for lunch every day during the workweek would have cost between 12 USD and 20 USD per meal. So by packing your own meals, you can save more than 3000 USD annually.
- Not going out every weekend: Skipping nights out would save a lot of money for long term. And even when you do go out, you can still save money by avoiding some of the ridiculously-priced items like excessive drinking, popcorn or fancy cocktails.
- Cutting cable: You can save a lot by cutting the cord, Netflix or Hulu. In fact, with internet you might be better off switching to a free online streaming service like YouTube.
- Reducing phone bills: It’s always worth searching for a lower cost service provider to lower your bill. If you’re a loyal — and incredibly persistent — customer, you can negotiate for a special deals and offers available.
- Cutting down on groceries: Before you head to the grocery store, make sure you have a prepared list of items you want to buy. That way, you won’t get side-tracked by things you don’t need or food cravings that pop up while you’re shopping.
- Canceling unused memberships and subscriptions: Get into the habit of checking your bank statements to see if there are any unnecessary subscription services that you are not benefiting from it. For example, you can find creative ways to exercise without going to gym, by for instance, running outdoors or walking out.
Invest In Retirement Account
Most of Americans admit that their biggest financial mistake was not investing in their retirement account, such as 401(k), Roth IRA or a traditional IRA, as early as possible. The benefit on investing into the retirement account, such as 401(k), is that its pushes the saving account by the magic of compound interest and excellent market gains.
If your company offers an employee-matching program, take advantage of it immediately and, increasingly, you can max out your allowable contributions. Consider, for instance, increasing your contributions by one percent every quarter.
Keep Aside High Amount Of Income
Although growing your money is about keeping expenses low, but it’s also about making a plan to save high percentage of your income.
After contributing to your retirement account 401(k), paying taxes, rent, groceries and other essential deductions, you can save all what remained from your paycheck as well as all of yearly bonus.
Also, you can enhance your saving by, each time you got a promotion, continuing to live frugality on your old budget, this enable you to save the full amount of your raise.
Don’t Compare Yourself with Others
Sometimes, people end up spending money they don’t have on something they don’t need — usually because someone else is spending on unessential items.
You should not feel the need to spend money to impress anyone. If you do, you may find yourself competing way past what your budget allows. Be happy with what you have and forget about what everyone else has or thinks.
Of course, you can reward yourself with purchases, but only on things that truly needed. Remind yourself that planning for the future should always come first.
Be An Hustler
Running a side hustle while also working a full time job isn’t easy, but it worthy. Because by creating aside hustle, you can increase your income.
If you have a hobby or particular skill set that people compliment you on all the time, consider starting a side hustle. You can also make extra cash by selling electronics, clothing, shoes or anything else.