Sometimes, the hardest thing about saving your money is getting started. This step-by–step guide on how to save money will help you devise a simple, realistic strategy so that you can reach all of your short-term and long-term savings goals.
1. Recognize your expenses
First, figure out how much money you spend. You should keep track of every expense, which includes coffee, household items and cash tips. Often students are using services that can write my essay for me but it’s not always the best way to spend your money.
Once you have your data organized, add up the amounts by category (e.g. gas, groceries, mortgage) and sum them all. Make sure to check your bank and credit card statements for accuracy.
Tip: Find a free expense tracker to get you started. Automating some of this work can be made easier by using a digital program. Bank of America clients can access the Spending & Budgeting tool. This automatically categorizes all transactions to make it easier to budget online and in mobile apps.
2. Save money by setting aside money
Once you have a rough idea of how much money you spend per month, it is possible to start organizing your expenses into an easily manageable budget. You should create a budget that shows how your expenses compare with your income so you can plan and limit your spending. Include expenses that you are likely to incur regularly, but not every other month.
3. There are many ways to reduce your spending
You might need to trim back if your expenses are too high. Recognize nonessential you can reduce, such as entertainment or dining out. Find ways to cut down on fixed monthly costs like TV and cell phone.
You can reduce entertainment expenses by using resources like the community event listing.
Cancel subscriptions or memberships you don’t use, even if they automatically renew.
It is a good idea to eat out only once per month and try new places that fall under the “cheap food” category.
Give yourself a “cooling down period”: Don’t be tempted by an unnecessary purchase. Wait a few more days. You might be pleased that you didn’t buy the item, or more likely to save your money.
4. Prioritize your priorities
Your savings goals, after your income and expenses, will likely have the most impact on how much you save. You should always keep in mind your long-term goals. It is important that you don’t let planning for retirement take precedence over short-term needs.
Tip: Make sure you know how to prioritize your savings goals in order to be able to plan where to save. If you know you will soon need to replace a car, you might start saving now.
5. Automated transfers are available from almost all banks between your checking account and your savings account.
You can control when, how much, and where to transfer the money. Additionally you can split direct deposits so that a percentage of each paycheck goes directly into your savings accounts.
Tip: Splitting your direct deposits and setting-up automated transfers are simple ways of saving money. It doesn’t take long to do this and you have less temptation to spend it. Bank of America clients have the ability to set up automatic transfers from their mobile and online accounts.
Each month, check your budget to see if you are on track. This will not only help you keep to your personal savings goal, but also it helps you quickly fix and identify problems. Knowing how to save money can inspire you to look for more ways to save money, and help you reach your goals faster.