This is a collaborative post.
With the new year comes an onslaught of new year’s resolutions. In a perfect world, every resolution would change from year to year. However, it may seem that your list is plagued with some repeat offenders. One of those repeat offenders is very likely saving money.
While your intentions on January first may be incredibly thrifty, events, emergencies, and all-around necessities seem to come out of nowhere and quickly drain your bank account, reforming your personal economy in the new year. When things show their first sign of not playing out, it is incredibly easy to postpone the resolution until the next new year. It is time to stop waiting!
Saving money this year is actually an incredibly easy and possible task. But it requires shifting how you think about saving and not looking at saving money as an unwieldy, overarching task that is easy to give up on. By breaking it up into smaller, very manageable tasks, you will find yourself rolling in wealth that you did not know that you had!
1. Make a Budget
You would not expect to build a house without a blueprint. Why, then, do you expect your budget to work itself out without really writing everything down and planning everything out? Making a budget is the most important part of saving money, and it should be easy work out with all the fresh motivation of a new year’s resolution!
Creating a budget is surprisingly simple, and it is simply a question of how much of your money is going where. Sit down and take a good look at the money you are taking in and the money you are spending. Decide how much of that money is needed for necessities. From there you can determine how much of your earnings should be put into savings and how much extra can be spent. If you find you’re paying too much for hosting services, consider switching to a more cost-effective web host. If you’re struggling to pay credit card bills and worried about whether or not you have a good credit score, then a budget will also help you get on a better path to amending that.
In an ideal world, of the money that is left after paying for necessities, at least fifty percent should be stored away for savings. If that is not possible, that is okay. You can plan to put away as few as five dollars a week, but you must be realistic with yourself when planning your budget. Realistic planning is a critical part of saving money that many often forget about.
2. Make Sure Your Savings Are Savings
Often times people will put away their money for “saving” but then quickly dip-into those savings to cover the expenses in their life. If you really want to save money this year, the money that you plan to save must be put into a specific account and basically forgotten about. You need to change your mindset about the money. It must be mentally considered un-spendable money rather than back up plan money.
When planning your initial budget, you must make sure that you have accounted for the fact that this money cannot be used to cover small expenses. The only way the money will build up over time is if you do not turn to it to cover flaws in your initial budget. This may mean putting your money in an entirely separate account than the money that you have allotted yourself to spend.
Your savings money should also be separate from your large-purchases savings. If you’re saving up for a home remodel, setting money aside to hire a defense lawyer, or trying to save money to get a long-term corrective eye surgery, these are all big spending events that you need to save for. However, the money you put aside for these big purchases need to be separate from your actual life savings.
It may feel like a waste at first to diminish your own earnings, but by taking money away from yourself, you will have more money in the long run. This is the money that will act as a security blanket if a major emergency comes up or as a luxury for a trip down the line. By really committing to saving your savings, you will, shockingly enough, start to save money!
3. Buy Store Brand for Everyday Goods
Humans are creatures of habit, so it is not surprising that you fall into the habit of buying the same products every time you go to the store. However, your personal habit may not be the most economic habit. By buying anything other than the store brand equivalents of your necessary products, you may be wasting far more money than you realize.
There is more often than not little to no difference in the makeup of the store brand product and the label product. The only differences are habit and the price. If you can seek to break your own habits and start buying store brand, you may end up taking ten dollars off of your usual grocery order.
From there you can either put these extra dollars into your savings or add it to your spending money. If you elect to compromise on the brand of face wash you use, you may have more economic liberty to spend a night out with your friends.
4. Buy Quality Brands for Long-Term Goods
This might seem to contradict the previous point and seem like a more expensive solution, but it’s not. There are some things where you only have to make an occasional purchase for an item that should last you several years. Things like high-quality mattresses with a 10-year lifetime or more and well-designed outdoor camping gear can similarly be enduring. While you may initially pay more for these items, the point is that you will save by not having to buy them repeatedly. Cheaper products can wear down more easily, so if it’s something that is supposed to last, go for quality over cost.