Without a doubt, all of us agree that money is a vital part of our lives. It’s what drives our economy but why does saving money have to be so difficult?
The median American household only has $11,700 in savings, according to data from the Federal Reserve and the Federal Deposit Insurance Corp (FDIC). Why is making money, even something small as making $10 fast, to save such an issue for most Americans?
That number seems like it should be way higher, so we wanted to share some easy money saving techniques that anyone can do.
Why Saving Money is Important?
Saving money is one of the biggest challenges for most people, especially when they are accustomed to a certain lifestyle.
Changing ones spending patterns requires a lot of self-discipline along with various other techniques and steps. Essentially, the question that most people ask themselves when it comes to savings is, how does a person find the motivation to save money every month? The answer lies in setting a goal.
Goal setting is a very powerful technique that many people employ in order to reach their desired outcomes. Studies show that people that set goals are much more likely to succeed in their endeavor as compared to an individual that has no goal. With that being said, start off by setting a goal for yourself. What exactly do you want to save for? Is it a new house? A vacation? A new car? Better lifestyle? Your firstborn child?
Whatever the goal may be, it is important to write it down so that you always have your outcome written down on paper. This way, you will always be able to keep your goal in sight which makes savings a lot easier.
At this point, it is important to realize that the saving goal should be feasible. You do not want to set a savings target that you are not going to be able to achieve with ease. Setting too high a savings goal will get you frustrated really quickly. In fact, studies show that most people give up on savings because they are never able to reach their savings goal.
The next logical step is to manage your budget so that you know how you will save the money and ultimately reach your final goal. Write down all of the expenses you incur in a month and then weed them out.
Remove any expenses that you can do without. It is recommended that you stop using your credit card otherwise you may be swimming in circles since credit card bills increase debt. Write down any and all expenses that you make and be disciplined about your cutbacks.
Don’t give in to the temptation to spend otherwise you will never reach your goal. Instead, think about how rewarding it will be when you reach your savings goal.
Above all else, remember that patience is the key to success. Don’t let little hiccups in the road to your savings goal distract you from the big picture (your ultimate objective).
In the end, you will find that you have reached your savings goal and you will appreciate it because you alone know how hard you worked and saved for it. Here are some other simple tips to take into account when building your savings account.
1. Sleep on it.
You can first cut down on large expenses by simply sleeping on it. You might find that you may not want that costly item the next day, which is often the case. This has helped me so many times that it needed to be placed in the number one position. The best part? It’s so easy to do!
This one requires a bit more work, but not much more. Whenever you’re leaving for a long trip or even to work, consider unplugging some of your appliances. Keeping these appliances plugged in when they aren’t required leads to higher electricity bills.
How much can you save?
So at 13 watts, the DVD player consumes about 114 kWh per year. Assuming an electricity cost of 11 cents per kWh (your actual cost may be higher or lower, depending on your provider), the cost to power the DVD comes to about $12.53 per year or just over $1 per month. Every penny counts, and if you think about how many appliances are plugged in that aren’t used, it adds up.
3. Plan out your expenses.
Do you know where all your money is going on a monthly basis? If you aren’t budgeting, then you can easily overspend. The best strategy is to check out some of the best budgeting apps to help you plan and manage your finances better.
4. Make use of natural light and air.
The other reason why we are not able to save money is that we depend too much on electrical appliances. The electrical appliances offer us coolness and light and make our lives smoother. One should try their best to make use of natural air and light in order to get rid of their dependence on electric appliances. We can save a huge amount of funds that we would usually spend on using electric appliances and tools, by using natural light and air.
5. Build a side hustle.
I’m a firm believer that the best path to financial independence is generating more income. While your savings are usually capped based on your needs (housing, food, fixed expenses), you can usually always boost your income. Some people may not know where to look but there are a bunch of online jobs that you can use to make extra money.
The Bottom Line
While saving money may seem easy, it can easily be brushed off with the complexities that life brings. However, starting little by little, and tracking where your money is going every month, you’ll be closer to reaching your savings goals.
Learning how to save money doesn’t need to be difficult. Start today, and your wallet will thank you later.