If you are like most everyone else out there, this recession has been a loud wake-up call to cut back on frivolous expenses, and save more. Now that the economy is slowly bouncing back, consumer spending is starting to rise and savings rates are going back down.
There’s nothing wrong with spending a little on unnecessary items once in a while, don’t neglect your long-term financial goals, like paying off debt, building an emergency fund and saving for retirement.
Here are 3 easy ways to save money and free up extra cash to meet your financial goals.
Tip #1: Create a Money Routine & Stick to it!
Having a routine when it comes to your money is one of the best ways to master your personal finances and avoid unnecessary expenses like overdraft fees and late charges. Most people don’t intend to make late payments or overdraw their bank account, but basic money management can fall through the cracks when you don’t have a money routine.
The solution for staying on top of your finances and never getting hit with expensive late fees is to create and stick to a Money Routine. Set aside a couple of hours, one day each week to balance your checking accounts and pay bills or set up bill payments online.
By sticking with your routine, you will accomplish more in your financial life, like following a budget, closely monitoring your investments, and SAVING MORE MONEY! It’s also a great way to catch a would-be identity thief who could wreck your finances.
Tip #2: Calculate how much TIME that item will cost you before you buy
A great way to rein in spending is to consider what an item costs you in time, rather than dollars, before you buy it.
I’ll use Sarah as an example. She works as an administrative assistant in an insurance office and earns $15 per hour. Whenever Sarah is trying to decide whether to buy something, she divides her hourly wage into the price to figure out how much working time the item would cost her.
For example, if a new outfit cost $100, and you devide that $100 by $12 (the amount you make per hour), that new outfit will cost you a full day's work before you pay taxes! Do you love that new outfit enough to spend that much time earning it? If the answer is no, just walk away, and save your hard earned money for something that is worth it.
Tip #3: Be a Smart Grocery Shopper
Most people think they can save money by eating more home-cooked meals. But don’t be fooled. Buying groceries won't automatically save you money. If you show up at the supermarket hungry and without a plan, you can easily buy more than you need or make expensive choices.
To save on groceries, always plan a menu for the week. Make sure to plan a couple of nights to eat up those left overs you are sure to have. Try making the main dish of one meal without meat to save more and eat healthy. Coupons can certainly help lower your food bill, but don’t get lured into buying something you don’t need or that isn’t a healthy option, just because you have a coupon for it.
When you’re at the grocery store, only buy what you can eat. Prices for non-food and some non-perishable items—like paper towels, soaps, toothpaste, and drink mixes—can be too high. Do your research to see if prices are lower at local discount warehouse stores or drugstores.
You might be surprised by how much small changes can reduce anxiety about money, improve your financial life, and make you feel more in control of your financial future.
