One of the best feelings in the world is getting paid for the first time. You are finally earning money to use it however you want! But there’s one problem, it can be easy to spend the money you earn right away. Maybe that’s why you are here, you are trying to learn what is the best way to save money.
Well, you came to the right place! Here you’ll learn how to avoid the problem of spilling all of your hard-earned cash as soon as you get it.
Why save?
We get it, once you receive your first couple of paychecks, you feel on top of the world. However, sometimes all that money runs out before you even know it. Believe it or not, that usually happens thanks to that brand new smartphone, that movie streaming service you hardly use, or those nights out with friends every single weekend.
Don’t get us wrong, it is ok to pay for those kinds of things every now and then, but when it comes to your personal finances, like with everything in life, you should have priorities.
How do you think you could ever be able to pay for that house of your dreams, that trip around the world you always wanted, or even for the pension you’ll earn once you retire? Yup, you guessed right… All that will be possible only if you start saving.
All these things you dream of having someday are nothing but saving goals. By keeping up with your finances and prioritizing savings, you’ll not only be able to achieve all these goals but also avoid financial stress at all costs.
What is the best way to save money?
Now, if you want to reach your saving goals, you must implement a method that helps you control your expenses. But… What method can you apply? What is the best way to save money after all?
The answer to those questions dear friend is… all of them. Yes, exactly what you read. All the saving methods can be helpful to control your personal finances and you can apply whichever one you like.
The truth is there is not just one best way to save money, there is no one-size-fits-all solution for everyone. However, here are some of them to give you a head start.
Money-saving challenges
Money-saving challenges are a perfect way to save money and keep things fun.
One of the most popular challenges out there is the 52-week money challenge. In this one, you have to save the same amount of money as the number of the week of the year. For example, save $1 in week 1, $2 in week 2, and so on.
You can turn this up a little bit and multiply these amounts by 5, 10, or whatever you want. So for week 1, you’ll save $10, for week 2, you’ll save $20, and so on.
Save money on daily chores
Believe it or not, daily chores are a great way to save considerable amounts of money over time. Get started by following these tips to save money at home:
- Consider taking a walk or riding a bike to save money on gas
- Turn off lights you are not using
- Turn broken household items into new DIY products
- Live frugally and avoid unnecessary expenses
- Make a shopping list to avoid impulse buying
Feel free to choose whatever method (or methods) adjusts to your needs and your lifestyle. The only thing you MUST make sure to do is learn to have self-control and trust the process. It’ll help you to stick to the plan and keep your personal finances in order.
What about budgeting?
Besides all the great ways to save money out there, having a budget is one of the most used and recommended methods to keep your financial health on point.
“What is a budget?” you may be wondering. A budget is an amount of money you anticipate you’ll need during a certain period of time. In simpler words, how much money you’ll need for a determined activity.
Keeping a monthly budget can help you track how much money you receive as income, as well as the expenses your money goes towards. In this way, you will not only know how much money your bank account has, but also how much you are actually saving towards your goals.
The 50-30-20 Rule
Just as saving methods, budgets can be done in several ways, therefore, you have to find the best option for you. One of the most popular budgeting strategies is the 50-30-20 rule.
How does it work? Simple. All you do is divide your income into three portions:
- The initial 50% (half of your salary) is used for first need expenses such as medicine, food, rent, and utilities.
- 30% is used to pay for things you like, but are not essential. For example some technological devices, new clothing, or a night out with friends.
- The remaining 20% goes directly into your financial health check as savings, debt payments, or investments.
Yes, it’s that easy. All that’s left for you to do is to calculate the percentages according to your financial situation 🙂
One of the greatest benefits of the 50-30-20 rule (and a reason why it may be considered by some people as the best way to save money) is that it forces you to set apart a portion of your income towards your savings. If you follow this strategy properly, you’ll find that you will no longer spend your money on unnecessary expenses or impulse purchases, but instead prioritize your savings.
Finally…
Budgeting with the 50-30-20 rule can help you to keep your savings in order. However, as we stated earlier, there’s not only one best way to save money. Make sure to try several methods and choose the one you feel most comfortable with.
Despite all the different strategies to save money, some common tips have proved to be effective once you implement them. Make sure to check the rest of our articles to learn more about simple saving tips that you can start applying to your daily life right away and see positive results reflected in your personal finances.
