How to save money
| 27/2/2008 | Posted by Pete under Life Hacks |
Saving Money
Below are five tips that should put you on the right path to saving money.
Set up standing order to savings
By automatically shifting the money into your savings account, you will reduce the tendency to spend it, knowing that you will have to transfer the money back into your current account in order to do so.
Measure where your money is going
This post [lifehacker] shows you how to measure your finances in a way that is useful, and quite revealing. If you can see what your perception of your spending, and compare it with the actual spending you will be able to see where any discrepancies lie, and be able to act on it. The next point addresses just that.
Cut out Bad Spending
If you did the exercise above you should be in a position to cut out spending where you feel it would be appropriate. Any spending which is just wasting your money, or that you don’t really get anything useful out of it can be pruned, in some cases drastically. Note that I am not advocating that you reduce your charitable donations, unless it is appropriate, given your level of income, just that you need to decide that it is important enough to leave in there.
If you have any subscriptions (DVD, magazine, dare I say internet…) that you no longer require or enjoy, be sure to scrub those off the list of things that you spend your money on.
Reduce what you can
There may be areas that are essential spending, but can be pruned to reduce your outgoings still further. For instance buying a cheaper brand of coffee. Note that this will not work if you are a coffee snob, you will just end up feeling that reining in your spending is just too much sacrifice. If the quality of something is important to you, then it may be worth spending the extra money (or time) to get what you enjoy.
Areas where this can work is in buying cheaper groceries, which will save you a small amount, but consistently, as well as tidying your hard drive rather than buying a new bigger one. This technique works extremely well when you don’t have any emotional attachment to the item you are buying. Guys, don’t try this tip when buying flowers or chocolates for your significant other – you will not be appreciated.
Journal the above
A useful mechanism to keep you on track is to journal the activities you do in aid of this. Not only will it prove to be a useful reminder when your circumstances change, your spending creeps up again, and you need to do this all over again. It will also be a motivating factor in replaying what you have done so far. This will motivate you to continue when you see how much you have saved, and if you had any fun doing it. Besides keeping a journal is just plain fun.
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ess & thanks very much