With good management, your money can go a long way. As they say, it’s not about what you earn, it’s what you save.
Creating a budget is a fundamental money skill, but a lot of people still forego this important habit. If you want to grow your money, budgeting and saving is the first step to making it happen.
Set Your Financial Goals
They say that if you aim at nothing, you’ll hit it every time. To have more money, you’ll need to have a target.
For beginners, we recommend starting with a financial goal. For example, you can target to save $10,000 in a year (we wrote a guide about this).
A financial goal tells you exactly what funds you need to be setting aside. This will start you on the path to better financial health and a bigger rainy day fund, as you’ll see.
Use tools to track where your money is going
Now that you have a financial goal, you’ll need some way to measure if you’re on track to hitting your target.
There are tons of apps and online tools that you can use to track your spending and manage your budget.
One of the best apps for budgeting is an app called Mint. You could also look into apps that track your investments as well, such as Personal Capital.
Which one should you choose?
Read our comparison of Personal Capital and Mint to see the differences between them, and choose the one that is better for you.
Specialized budgeting apps
There are some tools that are built for certain people.
For example, money issues are among the biggest sources of arguments between couples.
Thankfully there are many shared budget apps for couples that help them budget and save together, so that you both understand where your money is going.
This can minimize financial stress in a relationship.
Many people don’t realize how much they could actually be saving if they just spent their money more wisely.
There are two types of spending that take the most out of your wallet:
- Spending on big purchases
- Spending on daily expenses
If you pay attention to how you’re spending in these two areas, you could save a lot more money! Let’s talk about them.
Save on Big Purchases
There are a few purchases in life that will cause your bank account to take a hit. These are big purchases like buying a new car, a new house, furniture etc.
The great thing is that you only need to get a good deal on these few occasions to save thousands.
What we recommend first of all is to use price tracking tools and get in the know of price discounts and comparisons.
You can set alerts when the price of an item has dropped. Of course, you’ll need to plan ahead so that there’s time for the prices to fall.
For example, if you’re moving to a new home or renovating your home, figure out what type of furniture you’ll be buying. Then start hunting for deals months before you actually move in. This is a great way to save on furniture.
Save on Daily Expenses
While your daily expenses may not seem like much when you view them day-to-day, they have a huge impact on your financial situation.
Because necessities occur on a regular basis, making a few tweaks to your spending habits here can have compounding effects for your finances after a few months and years.
For example, meat probably accounts for a huge portion of your grocery budget.
You can lower your daily budget with our guide on some effective ways to save money on meat.
You don’t have to give up the little luxuries as well.
For example, if you’re a big soda drinker you can look for an alternative way to get your carbonated drinks that can help you save money, the environment, and your health.We did a study on whether the SodaStream can actually save you money, this is a great alternative to buying soda regularly.