When it comes to saving money, small changes can add up quickly. We all want to save money. And whether that means denying yourself that $5 Starbucks latte or putting off a week-long family vacation, everyone has their own ways of conserving money.
Saving can be easier said than done. Sometimes the hardest thing about it is getting started. However, it is imperative you start saving now so that you and your family can build wealth for later. Developing a financial nest egg for your future involves having a plan so that you can enjoy your life and have money for later, like a nice vacation or emergency purposes. Highlighted below are some great ways to conserve money to start towards the goal of financial freedom.
Start Recording Your Expenses
The first step to saving money is understanding your finances. Knowing how much money you are able to save while also living comfortably is crucial to building financial wealth for the future. Keep track of all your expenses, like rent, utilities, and even coffee. Record your expenses in whatever way is easier for you, like a monthly journal or a simple spreadsheet. There are even apps available to help you count your spending habits. Once you total everything up per month, see where you have some wiggle room to put some extra money in a savings account.
Start Including Saving in Your Monthly Budget
Knowing what you spend your money on is beneficial to creating a monthly budget. Your budget should portray your expenses relative to your income so that you can adequately plan your spending. Not only should you account for your monthly expenses, but you should also account for not-so-common expenses, like car maintenance or doctor visits. After this, include a savings category in your monthly budget aiming to save an amount that's most comfortable for you.
Automate Transfers from Your Checking to Savings
Take budgeting a step further and automate transfers from your checking to your savings. By automating transfers from your checking account to your savings account each month, that money will accumulate over time which makes it easier to save. This concept is also incredibly useful if your savings account is dedicated to specific goals, like creating a financial nest egg.
Find Ways to Minimize Spending
This is the oldest trick in the book, but is tried and true for a reason. Cutting back on your expenses is a great way to conserve money. Identify nonessentials like dining out at restaurants, entertainment, or shopping. Anything you can think of to trim down on spending will save you more than you think. Additionally, look for ways to cut back on your fixed expenses as well, such as your car insurance or cell phone plan.
Set Saving Goals
Sometimes it's easier to save when you know what you’re saving for. For some, it may be hard to wrap your mind around saving just to save. Come up with a long-term saving goal that will motivate you to save your money. Then estimate how much money you’ll need and how long it will take you to save it.
Set Yourself Up For Financial Freedom
Saving to create a financial nest egg will provide many benefits for your future. Review your monthly budget, analyze your spending, and start your personal savings plan. Understanding how to save money will allow you to hit your financial goals faster than ever.
Source: Bank of America (2023) 8 Simple Ways to Save Money
Source: Courtney Neidel (2022) How to Save Money
Source: Regions (2023) 10 Best Ways to Save Money