Spending money is easier than saving it for your future plans and it helps us in meeting our shirt as well as long term goals nicely.
Whether we save it for our short term plans like monthly expenditure or long term plans like for life insurance, car insurance, a proper budget plan is required.
The monthly budget varies from person to person depending on their income and their essential requirements.
Here are 5 simple and realistic strategies that can help you save money for all your short- and long-term goals.
Record your expenses
The first step to start saving money is figuring out how much you spend. Keep track of each and every expense which means even a coffee, household item and regular monthly bills. Record your expenses by writing with a pencil on a paper or in a simple spreadsheet . Once you have your data, make a total of the amount to organize the amount by categories such as gas, groceries and mortgage. Use your bank statements to make sure you have included everything.
Include saving in your budget
Now that you know what you spend in a month, you can begin to create a budget. Your budget should show what your expenses are relative to your income, so that you can plan your spending and limit overspending. Include a savings category in your budget and aim to save an amount that initially feels comfortable to you.
Find ways to cut spending
If you can’t save as much as you would like, it might be time to cut back on expenses. Identify non essentials such as entertainment and dining out on which you can curtail your expenses. Look for ways to save on your fixed monthly expenses, such as your car insurance or cell phone plan, as well. If you are running out of money do not purchase nonessential items and rather develop a plan to save for it.
Set savings goals
One of the best ways to save money is to set a goal. Start by thinking about what you might want to save for—both in the short term and the long term . Then estimate how much money you’ll need and how long it might take you to save it.
Determine your financial priorities
After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. For example, if you know you’re going to need to replace your car in the near future, you could start putting away money for one now. But be sure to remember long-term goals, it’s important that planning for retirement doesn’t take a back seat to shorter-term needs. Learning how to prioritize your savings goals can give you a clear idea of how to allocate your savings.