Methodical Ways To Save Money

By John

At some stage in their lives, most people think they ought to be saving money. In challenging times like the present, more and more individuals are probably resolving to do so but have no clear idea how to go about it. It is not actually too difficult to save money if you go about it in a planned, methodical way and are aware of the different ways to save money.

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So you want to save money — what For?

You must establish the reason for wanting to save money. Is it because you are finding it hard to make ends meet, or because you want to improve your quality of life in some way, or because you want to take the family on a special vacation, or buy a new car or house, or because you want to set the ground for a secure financial future? No matter what the reason, once you have identified it clearly you have a goal and can plan how to achieve it.

How to reach your goal?

When planning how to reach your goal you need to establish three things:

1. The time-frame – when do you want to reach your goal?
2. Income – now, and in the foreseeable future.
3. Expenditure – especially fixed items, now and in the foreseeable future.

Now it is a matter of juggling the sums: You know how much you want or need to save, how much time you have to save it in, and how much you can expect to receive and spend within that time-frame. Since income and fixed-item expenditures are pretty much finite, you will probably have to adjust the time-frame so that you have a realistic chance of meeting it by making savings from your disposable income.

You now know how much you want or need to save, over how long a period. You next need to identify the areas in which you can make savings.

More ways to save money

Where to make savings?

Depending on your circumstances and the amount of money you want or need to save, you may have to consider options like moving to a smaller house or down-sizing your car, or selling one if you have two, or getting rid of your boat. For many people, however, it is more likely to come down to a reduction in annual and monthly expenditure.

Annual expenditure could be things like gym and golf club memberships, and insurance premiums. You may have to make some hard decisions about what to give up or downgrade, which will depend on how serious you are about saving money.

A reduction in monthly expenditure is not hard to achieve, if you approach it in a methodical manner. You already know how much you intend to save, according to your plan. One smart idea is to separate that amount from your paycheck as soon as you get it — some employers may help you do this — and keep it somewhere safe. An interest-bearing savings account is the obvious choice and would bring additional benefits, such as making your money work for you.

Slicing the pie

Monthly expenditure typically falls under these categories:

• Household
• Utilities
• Transportation
• Food
• Groceries
• Clothing
• Entertainment/lifestyle

There are innumerable ways to save money — some big, some small — in each of these categories. Most of them involve some online research to get the best deals, some comparison-shopping, and a conscientious effort to use less and waste less. You should keep a detailed record of what you spend – there are many smartphone apps that can do this for you – in order to ensure that your budget remains on track.

A sound planning process and sticking to the budget you have set are essential to achieve your goal of saving money.

Click here to compare multiple offers and save hundreds of dollars on credit cards, cell phone, phone plans, Internet access, mortgages, and so much more. Free comparison tools.