Saving is expected to be simple, but the truth of the matter is that for most people, having spare or extra cash can be difficult as the number of expenses they have to attend to piles up. There are several unexpected expenses that must be catered for, they also make it impossible to save.
In a recent study that was conducted by an American journal, it was revealed that over 78% of Americans live on paycheck to paycheck. This clearly means that without surplus cash, it is extremely difficult to save.
You have to set a goal; one of the most important reasons to save is to think about any reason why saving should be done. The reason could be that you are trying to save money for early retirement or even to begin an emergency fund, also, you may have plans to get a lovely gift for yourself or for your loved one.
Each of the reasons for saving could mean that you have to save a larger or smaller amount of money. Having a substantial reason for trying to save is one of the most steps you have to take towards saving.
Regularly track all your expenses; this is one of the most difficult parts for most people. To save, you have to sit down and carefully evaluate your expenses and the bills you have to sought out. Tracking your expense including that cup of coffee you just had or even that gum you just bought.
If you are able to track all your expenses, it will become easier for you to group all them into several categories. Also, this category will help you identify the essential and non-essential expenses. For instance, the money you spend on gas for your car is essential, but the one you spend on lunch or dinner while you have food at home could be classed as “non-essential”.
Have a budget; a budget is one of the helpful tools that everyone should have if they want to save. While it is true that most people who are trying to save already have a budget without knowing it, it is important that they reconfigure their budget based on the essential and non-essential category.
After that, you may have to look through the non-essential category and cut the cost for most of the items listed there. Instead of having to eat out, you could decide to make more food available for consumption. You could also decide to remove certain premium channels on your subscription or could make a cup of coffee at home instead of having to buy on your way to work.
Reduce the way you use your credit card; it has been reported that in the United States, the average household owes about $8,000 in credit debt. The report further reveals that the national total is over $1 trillion. It is important that you remember that living on paycheck to paycheck will mean that every penny must count and these credit card rates are high. Although it is quite impossible to pay down credit card debt, certain tips will help to make the process simpler.
The initial step would be to quit making use of the credit card, especially for non-essential items. Accrued credit card interests have been referred to as a “money-stealer”, so it is important that you immediately begin paying off these balances.
Finally, start saving! After creating a budget, you should have a proper idea of how much you are able to save after deducting your total expenses. It is stated that about 20% of your earning should be saved, but this does not mean that you cannot save less.
It is important you remember that every money you save is a step in the right direction. To help you save, it is important you “pay yourself first” which literally means that you save first before offsetting any bill at hand. you can even set up a savings account for this purpose.
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