No matter what stage of your life you're in, financial stress is the same for everyone. Debt can be completely crippling and weigh down your every thought and action.
But what's important to keep in mind is that it's possible for anyone to turn their finances around and keep debt at bay. All it takes is a little discipline and a few smart saving tips.
This fiscal fitness guide offers 9 money-saving tips on how to save up and pay off debt or book that dream holiday you so deserve!
9 Tips on How to Save Up and Gain Financial Freedom
Not many people really know the feeling of true financial freedom. Much of the U.S. population today has some form of debt, while others are simply drowning in it.
So what would it feel like to have extra money left over at the end of every month? Is it really achievable in today's day and age where spending money is not only a necessity but more of a societal obsession?
The truth is: saving money actually begins with your mindset.
Many people tend to think of saving money as ''restrictive'' when saving should simply be viewed as a spending plan. You don't have to stop spending altogether, you just need to prioritize certain financial goals.
Here are 9 tips on saving up more money:
1. Reassess Your Budget
One of the best ways to start saving money is to re-look your monthly budget. How exactly is your money being spent and are you allocating your money wisely?
Quite simply, you need to apply the 50/30/20 budget breakdown in order to get serious about your budget and savings.
Basically, you should devote 50% of your income to living necessities such as rent and other living expenses. 30% of your income should go towards the things you really want. And 20% should be set aside for savings.
If you find that your monthly spending exceeds any of these percentages, adjustments need to be made to how you spend and save your money!
2. Track Your Spending
This really should be a no-brainer for any adult who has to live off a monthly or weekly budget. If you're serious about managing your finances, debt, and savings, you should be tracking your spending.
This means you should be tracking your monthly cash flow i.e. your income minus all your monthly expenditures. Tracking your spending will make it easier to follow your progress in meeting a savings goal and paying off debt.
3. Set a Savings Goal
When it comes to saving, the prospect is made so much easier by having something to save for. Set yourself a savings goal, something that is achievable.
Whether it's saving for a vacation, paying off a portion of your debt, a wedding, a special gift for a loved one, having a goal makes it all-the-more realistic.
Once you've set your goal, figure out how much money you'll need and create a budget plan on how long it will take you to save it.
Make it easier for yourself by breaking down this plan into a savings timeline. This way, you can set yourself small, achievable savings goals which add up to your overall savings goal.
4. Use an Automated Saving Tool
Make saving an automated thing from the get-go. How is this done? By using a banking app or bank account that takes all the physical work and thought out of saving each month.
A small savings amount is automatically debited off your checking account and squirreled away into a savings account. Before you know it, you'll look again and your savings have grown without having to lift a finger!
5. Apply the 30-Day Spend Rule
Why does society enjoy spending money so much? Because it offers instant gratification. But it can also lead to buyer's remorse. And debt.
This is where the 30-day spend rule comes into play in order to avoid mindless spending. If you see something you'd normally buy on impulse, take a step back, and take the time to think about the purchase. In fact, you should take 30 days to think about it.
Once this time has passed, you'll find that the urge to buy has passed too. Eventually, you'll develop a healthy habit of considering what you spend, before buying something you really don't need!
6. Only Spend Cash, If You Have It
This is a fantastic way to physically put a limit on how much you spend each week. If you're serious about saving, make a habit of withdrawing the exact amount of cash you're willing to spend each week and spend only that.
Anything that's left over at the end the week, including pocket change, should be deposited back into your savings account, not your checking account.
Using cold, hard cash instead of a debit or credit card makes it all-the-more difficult to part with your money. Stash your cards away in a drawer for the week and watch your savings pile up!
7. Track and Prepare For Food Spending
Most people would be shocked to see how much money they actually spend on food and eating out each month. This is where money and any potential savings disappears fast.
Before you head to the grocery store, do a thorough reconnaissance of your pantry and refrigerator to take stock of what you really need. Make a grocery list and stick to it.
You can also use coupons and loyalty programs to save on your food spending where possible.
8. Limit Your Online Spending
Online shopping is an incredibly huge industry worth billions of dollars. This is where much of the U.S. has racked up its credit card debt and lost out on savings.
In order to limit your own online spending, make it difficult for yourself! Go back on previous shopping sites and delete your billing and shipping address information.
Stash away your credit card and you'll find yourself less likely to buy on impulse if your credit card number and shipping address isn't readily available.
9. Use Credit Cards Out of Necessity
Credit card debt can become a black hole of despair that is very difficult to recover from if you have a habit of leaning on credit for spending.
If you have trouble controlling your spending on credit cards, make a point of hiding them in a drawer or cupboard. Don't keep them in your wallet. An "out of sight, out of mind'' mentality may help in controlling your spending and increasing your saving.
Learn How to Master Your Finances
If you're looking for more helpful tips and tricks on how to save up and master your finances, then Bootstrap Business is here to help.
Take a tour of our finance page for expert money management articles in order to achieve financial freedom. Maximize your frugal finances and fiscal fitness!
