What’s the most common way of losing money or not having enough when you need it most?
The answer is very simple, it’s spending more than what you are earning. Understanding this and preventing this is easily the most effective way of saving money and surprisingly enough, a lot of people often fall into traps that are designed to make them spend more than what they are really capable of.
Cutting back on expenses is very easy to do. All you have to do is review all your expenses and eliminate all the “wants” from the “needs”. By “needs”, I mean the things that you require to live and not the things that you think you need.
These “needs” that you cannot eliminate from your budget are food items, transportation/car expenses, mortgage payments, monthly household/utility bills, grocery expenses and your hobby/entertainment requirements. Expenses that arise from your hobby is a tricky one. I really believe that a person needs to have a hobby to maintain his sense of self and improve on a personal level. A good compromise is to have a strict budget when it comes to your hobby and don’t overspend.
As for the things that you can cut down or totally eliminate from your life so that you can finally start saving money, here are some examples.
Credit cards are a killer when it comes to accumulating debt. If you have a credit card and you don’t know how to control yourself, it’s only a matter of time until you are knee deep in debt that you will have to work countless hours just to pay off. One rule I have when I want to use my credit card is this: “Can I pay for it in cash right away?” If not, I don’t buy it, if I can, I buy it. Simple as that.
I’m not saying that you should throw away your credit card or never use it, you already paid the fees for it after all and it is quite convenient if you don’t want to carry huge amounts of cash everytime. You just have to practice self control and always be aware of how much money you have so that you can mentally compute if you can pay for the thing that you want to use your credit card on right away to avoid unnecessary debt.
Take out food and Dining out
One of the things that I am always proud of myself for is the fact that I learned how to cook at a young age. When I was out of college and started living alone, this skill became priceless and it actually saved me thousands of dollars yearly by not eating out or ordering foods to go on a daily basis. I still ate at restaurants and ordered take away from time to time but it never became a habit.
Cooking your own food lets you control what’s coming into your body and it also helps you manage your budget a lot better. A lot of the foods that you can find in various restaurants are so easy to make, it makes my head hurt thinking why people bother paying for those. Cooking is a must learn skill and I suggest that you try it.
Shopping online has never been easier and I must admit that I also do it. What separates me from a lot of online shoppers is that I don’t impulse buy whatever’s on sale and I always do research before buying in order to get the best price available.
You shouldn’t stop online shopping altogether, you just have to be smart about it. Look for deals, don’t buy whatever’s on sale, always do price comparisons and whatever to bring the price down. Shopping online will never go away and you shouldn’t take advantage of this convenient way of purchasing, just practice self control and don’t be an impulse buyer.
Subscriptions that you don’t regularly use
At one point in my life, i had subscriptions all over the place that I didn’t mind because they were cheap. However, one day, I realized that I never use them and when I calculated all those monthly fees, I was surprised and a bit angered at how much they were costing me. Individually, they were reasonably priced but collectively, the price adds up and it was at a level that I really didn’t want.
I had to stop those subscriptions and a lot of them were giving me hell before I can unsubscribe. Lesson learned.
Gadgets, gadgets and even more gadgets
Ask yourself and be truthful, do you really need an iphone, an android, a tablet, a laptop, a gaming PC, all the consoles, a 7.1 Dolby atmos speaker setup that you can never really take advantage of because it will annoy your neighbors and all that other gadgets/electronics lying around the house? You know the answer to this and you have to make the right decision.
Right now, I only have an android phone, a cheap model that does its job, a gaming PC and console because I like gaming and a modest stereo setup. I am perfectly fine with this setup because it allows me to do everything I want without costing a fortune.
Saving money is easy as long as you want to do it and you are prepared to sacrifice a lot of the luxuries in life that are not really needed. Practicing self control and always being mindful of what you can and can’t pay for will go a long way in ensuring that you will always have some money whenever an emergency arises.