A saying goes, 'save something so that you can eat during the rainy days.' It is a life metaphor. Saving money is an excellent start to becoming financially independent. If you want to have enough funds when you grow old and retire, it is best to practice some money saving techniques that are already proven effective.
When it comes to saving money, most people struggle to start and where to get the funds. These challenges are acknowledged as the primary hindrances that keep people from taking the initiative to manage their finances well. However, with proper tips and a saving money ultimate guide, you can ace a substantial amount of money for emergencies and investments.
Here are 25 tips to follow to save money:
1. Get a bank account dedicated for savings
This is very basic. You want to save money, get a bank account dedicated for it. The idea is you won't touch this account for a long period of time. Find a savings bank account that yields higher interest rate.
Here are some savings accounts with higher interest rate.
The basic requirements to get started are pretty simple. Most of the time, you are required to go to the bank of your choice and personally open an account. You need to pay an opening fee and make an initial deposit. However, the corresponding amount for these two depends on the type of account you want to open. Usually, for a basic savings account, you need to prepare at least PHP 500 for the initial deposit. To make sure you have the right amount ready, it can help call the bank first and inquire.
2. Use a piggy bank
Perhaps, this traditional method is very known in the country, especially in teaching kids how to save money.
Having a piggy bank teaches you the value of saving at an early age, but this does not mean that you do not need a bank account anymore. It is still advised to have one for security.
On the other hand, there is a proposed bill about anti coin hoarding in the Philippines. If possible, avoid saving many coins. It can be better to put them on a bank after reaching a certain amount.
3. Avoid impulse buying
Impulse buying is an unusual urge to buy something you do not need. It is more of a 'want' than a 'need.' When you do impulse buying, you are forced to get out of your usual budget, and it is not helpful.
While it is true that you sometimes need to reward yourself for all the hard work, doing it always is not anymore a form of 'rewarding yourself.' That is where you should draw the line.
The next time you get inside a mall, make sure you need it before buying it. Instead of paying money for your unnecessary 'wants,' deposit it on the bank.
4. Rethink your need for a credit card
Aside from savings accounts, banks also offer credit cards. This is where the concepts of debit and credit cards came into the picture.
For those confused yet about the difference between the two, a debit card is your savings account. Using your debit card in shopping or paying groceries means you are using your saved money. You do not owe an amount to the bank.
On the other hand, the credit card means 'debt.' Once you use it, the amount deducted from it automatically becomes a debt under your name, specific to the issuing bank.
A bank issues a credit card based on your current income, credit history, and other criteria. You need to physically apply for it at a branch, although there is already an option online.
There are pros and cons when it comes to having a credit card. The most prominent advantage is that you get to avail of products or services, even if you do not have enough funds. For example, you are booking plane tickets. When booking tickets, you have several options available, but if you do not have the money to pay for it upfront, you can use a credit card. Also, it gives you access to more merchants, especially abroad. For its disadvantage, the most usual one is the interest earned for the debt you owe. Most of the time, it will overwhelm you.
That is why you need to reevaluate first if you need a credit card. It can indeed be a lifesaver, but if not managed properly, it can make your life miserable.
5. Make necessary investments
There is nothing wrong with having investments. But you should only have the right ones. Do not fall for 'too good to be true' schemes since most of it is proven to be just scams.
If you want to have wise investments, go for franchising a business, building your brand, or buying real estate properties. You can also invest in stocks and bonds, and of course, insurances for you and your family.
6. Record expenses
Please keep track of your expenses by writing it down on a notebook or using a tracking app. This will guide you in monitoring your costs and evaluating if you are already above your set amount for the week or month.
7. Set savings goals
Saving money must be part of your goals. Remember that without the purpose, it will be somehow difficult for you to achieve your savings goals. Set both short and long term goals, so you can have a direction to follow.
8. Learn how to budget using envelopes
Use cash and put it inside empty envelopes with labels. This helps track expenses and make sure that you only spend the amount you put on that envelope.
9. Save automatically
Use a savings tracking app on your phone or set automatic savings goals on your bank app. This is to ensure that you regularly save a set amount of money on your savings account.
10. Get a retirement plan
You cannot work forever. Time will come when you need to stop already and relax. That is why you need to get the best retirement plan available. It helps you prepare for your future without burdening your family once you retire.
11. Avoid having too many subscriptions and memberships
If possible, cancel all your unnecessary subscriptions and memberships such as Netflix, Spotify, WatchGang, or even your gym membership. There are already plenty of other alternatives available than getting premium subscriptions. In terms of a gym membership, you can exercise at your house. If you do not have the equipment, you can find some alternatives, such as doing yoga, kickboxing, or Zumba.
12. Save energy and water
Do not leave unused appliances plugged into your power source. If possible, check the energy efficiency of every appliance you have. Change your light bulbs to lower wattage, especially if you do not need a particularly bright room. Moreover, learn how to save water. For one, water and electricity are considered utility bills. You pay for them. Imagine if you can further cut your usual usage, you get to save a few bucks.
13. Unsubscribe from emails
Make sure to unsubscribe from any promotional emails to avoid the temptation of availing their services.
14. Avoid online shopping sites
Nowadays, people are so immersed in online shopping sites that they end up spending much on these sites buying stuff that sometimes, they do not need. You do not want to be like them. So, kindly avoid installing any shopping apps on your phone or browsing their sites on the internet.
15. Bring your lunch
Instead of eating outside at a fancy restaurant or fast-food chain, why don’t you bring your food? It will save you money, and you are confident to eat nutritious food only.
16. Follow the 30-day rule
Instead of making an unplanned impulse purchase, save that potential purchase for 30 days into your savings account. If you still want to buy that item after the 30 days, go for it. Otherwise, the money stays in your account.
17. Invest in quality
Do not buy cheap things just for the sake of it. Instead, purchase something costly, but can last for a long time. This will save you money in the long run.
18. Switch to a cheaper cellphone plan
If your current cellphone plan is taking a toll at your budget, ditch it and look for an alternative instead. Perhaps, you can switch into a basic plan, especially if you do not need data but call and text plan.
19. Plan big purchases
If you are planning to upgrade your appliances or maybe buy a new one (aircon, television, etc.), it is recommended that you schedule it ahead of time and check for possible sales or discounts.
20. Take public transportation
If you do not have a car, it is best to take public transit rather than a cab. Also, if you are planning to buy a car, think of its advantages and disadvantages. Most of the time, having a car these days becomes a liability rather than an asset.
21. Ditch your vices
If you are smoking, drinking alcohol, or gambling, ditch those vices right away. Those will not help you save money. Instead, you will get sick and spend more money for the hospital bills.
22. Sell everything (if you do not need them anymore)
Get rid of the things in your home that you do not use or that you are willing to let go. Try to check the things you have at the attic or your basement and evaluate if some of those are still useful. You can only be surprised to see how much clutter you have in your home. Include as well your pre-loved clothes, bags, and shoes. All the money you get from those can be put to your emergency fund.
23. Use discount apps like Groupon or Metrodeal
Try checking Groupon or Metrodeal for legitimate coupons you can use for your important purchases. Getting some discounts can already mean a lot in your finances.
24. Practice do it yourself (DIY) hacks
Before buying anything or asking someone to fix things for you, think about doing it yourself! This will save you money. Practicing DIY hacks are helpful if you want to save extra bucks.
25. Avoid coffee shops
Let us admit it. Coffee shops are expensive. It is okay to reward yourself once a month with a good cup of coffee, but do not make it a habit.
These are just some of the common money-saving tips you can try now. Remember, that it is important that you learn how to save money as early as you can. We are hoping that these tips will help you achieve your financial goals.
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