Mar 9, 2019, 9:11:10 PM Life and Styles
The sooner you start practicing better financial habits, the better it will be for you. Money plays one of the most important roles in life, and whether you are saving for your new car, your dream home, a vacation or your retirement, it can get very tricky and you might find yourself slipping.
Money management is a very tedious task and important too.
The toughest task in this challenge of saving money is the ‘Initiation’. Saving money on the side is very helpful and makes your life less stressful compared to taking loans. But if need the money now always check for the best personal loans before making a choice. You can relax a little if you know you have some extra funds stored for emergencies. Here are some tips to help you keep track of your expenses and save some money on the side for future purposes.
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#1. Tracking Expenses
Make sure to keep a track of all your expenses, be it a new pair of pants you just bought, a coffee at the local Starbucks or a snack at the movie. Writing down your expenses or simply entering them in a notes app enables you to figure out what are the major streams of expenditure for you.
This will help you to recognize areas where you can cut back a little the next month; maybe skip the snack at the next movie or try to cook more often instead of having a takeout.
#2. Design a Budget
Tracking your expenses and recording them will help you draw out a budget. A budget is the most necessary step in your process of saving money. It is required to have a clear plan for your expenditure. It should clearly outline your expenses and your income. You can draw out your expense areas and then fix a budget for each segment such as groceries, entertainment or shopping.
Designing a budget will make you figure out the extra expenditure that you can try to reduce. Another important thing to keep in mind is that you need to have a miscellaneous budget for some emergencies that you can never plan for. Have a fixed budget for irregular expenses such as car servicing or any other services that have a quarterly payment plan.
#3. Have a Goal
This doesn’t have much to do with the financial side as much as it does with the emotional side. Saving money is tough, especially when you are someone who spends on the higher side. Having a goal, be it a small term goal or a long term goal, helps you to stay motivated and fight off those urges of spending on unnecessary things.
You can have a long term goal like buying a house or the education of a child, or some short term goal like a vacation at the end of the year, a new TV, a new car or anything else that comes to your mind that you want to replace.
Make a goal, and keep it in mind when you save, so it gives you strength to stay within your budget.
#4. Start Saving
Now that you have listed down your expenditures and are tracking them regularly, have fixed a budget for your monthly expenses and have also set a goal for your savings, the next and most important part is actually saving money. This can be done in two ways, by reducing expenditure and by avoiding committing to new streams of expenditures.
You can reduce the amount of money you spend monthly by trying to replace some of the things that are in your routine. Maybe eat less takeout and cook more, this way you can reuse ingredients and save money and become healthy as well. You can also try taking public transport like a bus instead of a personal cab. Each penny matters.
Here is one more thing you can keep in mind. Even if your credit score and your income allow you, avoid committing to new monthly expenditure. Even if you find the best personal loan or a new scheme, stay away from it. Stay smart and vigilant of your expenses.
#5. Track your Savings
Regularly checking up on your savings, say every two weeks or every month, can give you the motivation required to keep going. It gets tough but it will be worth it when you can see the extra money you saved up and how closer you are to your goal
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