When it comes to personal finance, most of us know all the rules — spend less than you earn, save for a rainy day and so on, right? Then, why is it that time and again studies point to money or financial angst as the biggest cause of stress for people around the world? Why don’t we follow these seemingly simple rules and set things straight?
Because, it is easier said than done. It is quite a task to keep note of every dollar spent and saved. We totally agree!
At BudgetBakers, our main goal is to help people save money.
So then what do you do!
All you need to know to lead a rich life
We believe in empowering each of you to lead a richer life. This may mean different things to different people. For some of you, it may be having a great cup of your favourite coffee every morning and for some others it may be being able to afford an annual vacation with your family.
Put simply, a rich life is one in which you are not tied down by financial burdens, are in total control of your money and have full freedom to make decisions about what your money should be used for.
How do you reach such a state of complete freedom? It does not happen overnight, but over days, weeks, months and years of taking baby steps. It takes a lot of dedication, patience and practice. Only then will these small steps add up to a huge leap towards a healthy, financially fit, rich life.
To get started on this journey, all you need is to know is the answer to one crucial question: What are your priorities?
Knowing your priorities and balancing out your spending accordingly is what will help you manage your money better.
And once you start spending right, it becomes easier to start saving.
So here are some small changes you can make in life that will help you get started on a habit of saving without feeling the pinch.
5 Small Ways To Save More Money Effortlessly
1. Raid your pantry and organize it
When was the last time you looked at the food that is tucked away in the back half of your pantry? Go on, empty out your pantry and take a quick look at all what you have in there. Unless you are a big time hoarder and/or have a huge pantry, this shouldn’t take you more than 45 minutes. You probably already have enough food for the week waiting for you in your pantry.
Keep a garbage bag ready to throw away things that are past their expiry. Keep aside things you know you won’t use and can think of giving away to someone else who might use them. Take stock of what can be used in the coming days.
Some people go to the extent of creating inventory lists and meal plans using these ingredients. If you don’t feel ready for that level of organization right away, start by planning three meals you see yourself making using what you already have.
Make this a regular ritual. You will soon find that you can cut down your grocery expenses by a large amount just by ‘eating down your pantry’. In case you feel up for it, you could also try a pantry challenge to save a sizeable portion of your grocery budget.
2. Try a no-spend day every week
Let’s be realistic here. A no-spend month is too good to be true. It can be done, as some have already proven, but it’s too ambitious a goal to start off with. Remember, small steps are what you need to focus on. So, instead of a no-spend month, try a no-spend day every week.
For one day every week, try to get by without spending anything. This means you will have to make a plan and stick to it. Experts say that by practicing no spending on certain days, you will soon realize what really matters to you and which of your daily expenses can be avoided without much damage.
Having a clear picture of your priorities and wasteful spending habits is exactly what you need.
Some critics of this method have been calling it out as a mere postponement of spending and not real savings. But there is also the success story of Michael Airhart and his wife, both teachers who earned less than $40,000 a year in South Korea, who went on to build their own boutique hotel in Mexico. They did this by practicing two no-spend days every week for three years and ended up saving $100,000 to finance their dream.
3. Keep the change
Go back to the basics and get a spare change jar. Or, assign a special pocket of your wallet or purse for spare change. The rule is to never pay in change while making cash purchases and to put away all the change you have at the end of a day in this special pocket or jar.
If you are more of a plastic spender or online buyer, check if your bank offers a program that allows you to round off your spending to the nearest dollar. Some banks even match the rounded difference, thereby doubling your savings.
You are obviously not going to make a fortune by saving like this. But this is a painless way to save something small every day. At the end of the first month, you may end up only with $10 or $20. That’s okay, because if you persist, this could grow into a good amount. Some people have saved close to $750 in six months by just following this method. Not bad, right?
4. Set up an automated saving and forget about it
For those who are good at managing money, personal finance is like a game. They are always trying to beat themselves at saving more. They are, in fact, playing mental games to keep their money tucked away from their spending impulses. You could be that person, too.
As a first step, set up an automated saving for the day your paycheck arrives. It need not be a huge amount to begin with. Decide on an amount that works for you and instruct your bank to transfer it to your savings account as soon as your salary is credited. It works even better if you move the money to an account that is harder to access, say, to a deposit account that doesn’t come with a debit card. This will trick you into forgetting about that money and keep you from dipping into it.
5. Try the 52-week savings challenge
If you feel motivated enough after having set up your automated saving, stretch yourself a bit more and try out a 52-week savings challenge. There are many different ways to go about this. The original challenge starts by depositing or keeping aside increasing amounts of money every week, starting with $1 the first week, $2 the second week, $3 the third and so on up to $52 in the 52nd week. In this way, at the end of the year you will be left with $1378 in your savings account.
But you needn’t play with these rules. Get creative, tweak them a bit to fit your needs and means. Some people do it in reverse by starting to save $52 in the first week (when motivation is at its highest) and then reducing the amount by $1 every coming week. Others choose to vary the amount depending on the savings goal they aim to achieve.
Starting small is best for beginners as $1 a week or $10 a month will not pinch you much.
So what are you waiting for?
Try out at least one of these ways of saving today. The aim is to take away the stress and anxiety of managing money. Once you get into the savings groove, you will start looking at it as just another task you do and forget about.
How do you save money every day? Do you already follow any of these methods? How do you trick your mind into spending right and saving more? We are eager to hear from you. Let us know in the responses section below.