Saving money is on everyone’s checklist. But all too often, life gets in the way and there’s nothing left to save at the end of the month. At Xpress Money, we believe in empowering people financially, and have compiled six simple tips to get you spending responsibly and saving a little for a rainy day.
Track your expenditure:
You can’t change what you can’t measure. To find out how you’re spending your hard-earned cash, you need to keep records scrupulously. Use a smartphone app, or go retro and jot down your expenses in a notebook.
Save first, spend later:
We all want to put something aside every month. But timing is key. Waiting till the end of the month to put aside what’s left is a recipe for never getting anywhere. Start depositing chunks into savings accounts and investments the minute your salary comes in, and live on what’s left.
The 48-hour rule:
Impulse buying is one of the greatest enemies of a prudent budget. Just as you’ve figured out your finances, a shiny object strikes your fancy, and blows a big gaping hole in your budget. The 48-hour rule is designed to combat impulse buying. The first step is to establish a threshold for when it starts applying. Say you set your threshold at USD 100. The rule then stipulates that you cannot make a purchase costing more than USD 100 without giving yourself two days to mull it over. If you’re determined to make the purchase two days later, then it’s no longer an impulse buy.
Look for deals:
And no, we don’t mean haggling at your local grocery. Thanks to the wonders of social media, group-buying sites, and discount apps, there are many treats and occasions that you’ll never have to pay full price for again. Also keep an eye out on sales, and off-season offers. But it’s important to realise that purchasing something at a discount is still an expense not a saving, so keep watching out for those impulse buys.
Compare before buying:
The online world has a number of useful tools for the savvy budgeter. For instance, dedicated sites now allow users to compare prices on just about anything – from vacuum cleaners to televisions – and see where the product you want is being offered the cheapest. Extend this principle to shopping for groceries and essentials – and see which supermarket has the best prices for your weekly shop.
Don’t purchase with plastic:
We all have credit cards for a rainy day, or to help with emergencies. But a smart saver never lets debt pile up on a credit card – which is the most expensive form of debt one can have. Avoid high interest rates and late payment fees by sticking to cash and debit cards. Or if you have a credit card that offers loyalty points or cash back, make sure you immediately pay off whatever you spend.
So there you have it. These relatively simple tips will fast track your way to living responsibly on a budget, and start putting aside money.