Saving money forms a part of everybody’s life. Whether this is to treat yourself, go on a holiday or put it towards something bigger like a car or a house, making a budget and then sticking to it to save money is very important. As such, it’s also important to know the best ways that you can save money, as doing so can become an onerous task after a while. This article has been put together to highlight some of the best methods available for you to consider in order to save money.
Prepare for the Worst-Case Scenarios
If you are planning for the worst-case scenarios, then you are ensuring that any kind of money you do save isn’t going to be depleted at the first inconvenience. This can come in a variety of different forms, but a safe bet is to take out an umbrella insurance policy, which provides you with an extra layer of protection if your insurance doesn’t quite cover the cost of something. This will make it so that you are not left in any kind of financial hardship following an accident.
Save First, Spend Later
You should make sure that you are actually saving money before you spend anything. You are going to gain financial freedom a lot quicker if you are strict and patient with your savings. There are a lot of rules you can follow to ensure you are saving, but one that is favored by a lot of people is the 50/30/20 rule. This means that when you get paid, you put 50% of it towards essentials such as bills, food, and debt payments. Afterward, you should put 30% of your money towards something fun, this includes eating out and generally just living. Finally, you should put 20% of your money into your savings. This is good as it means you are constantly topping up your savings pot.
Stay on Track
You shouldn’t let money that could be contributed towards your savings slip through your fingers. There are a lot of banks now that come with their very own apps that allow you to set a specific amount of spending money and then divide money into pots so you can have one for bills, one for saving, etc.
Don’t Splurge on Payday
Every time you get paid, you are going to be tempted to go a bit wild and splurge your earnings. In fact, it was revealed that 1 in 5 people end up spending 50% of their wage in under 48 hours of getting paid. You should try to look at your earnings and plan how you are going to spend it and make it last. Before you buy something on payday, take a second to ask yourself whether or not you actually need it. The first thing that you need to do is prioritize your outgoings, such as rent and other bills, then you can start to think about what is going to go on treats for yourself and what is going to be put in the savings pot.
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