Back to Basics: Tips On How To Start Saving Money

Start Saving Early

The earlier you start saving money the better your financial situation will be in the future. If you are currently living with your parents then you’re in an ideal position to save because you likely have minimal expenses and have maximum discretionary income. If you’re out of the nest, then automating your savings, even with a small amount, is a great way to start accumulating a fund and build good financial habits.

If you can put away $100 a month into an investment (or savings) account, it is a great start. It is best to automate the savings to ensure consistency. Starting to save money early builds great financial habits quoteand character. These good habits are likely to stick with you throughout your life and will help you reach some of your financial goals, like owning a home, sooner.

Inflation rate is currently close to 2%. Inflation is the power of money. Over time inflation erodes the value/power of money. If your investment/savings account is earning more than 2% then you are beating inflation and ensuring the money you worked so hard to put away is not losing value.

Saving Requires Good Habits

When you have bills and good debt vs bad debt payments to take care of there is often very little left over to save. One of your options is to find a higher paying job, however that’s easier said than done and may take some time.  In that case, your other option is to break any existing bad habits and compensate by saving the money you may otherwise have spent for things you don’t need.

For example eating out or buying lunch may cost you $6-10 per day which adds up to $1440-$2400 per year! And that’s just one your lunch, what about dinner? If you can avoid eating out and cook your own meals at home then you’d be able to save half of that over a year.

Of course occasional outings and dinners never hurt anyone, but the point is to ensure it doesn’t happen on a regular basis. There are other examples which can fall into the category of bad habits such as retail shopping, impulse buying etc.

Reduce Your Credit Card Expenditures

If you can’t pay for it right now, consider buying the goods another time. Know how to properly use a credit card, because it can make or break you when it comes to staying out of debt. Unless it is something that is critical to your life, consider your other options such as delaying your purchase, waiting until the bill-41817_1280item goes on sale or researching online for a cheaper or alternative option.

Consider what it is that you are buying. Is it an investment? Will it bring you value over the long term. Does the item fall into need vs want? (Completely two different things!) Avoid using your credit card unless you know you can pay it back within 20-30 days.

Try Making The Extra Buck

Have any items to sell in classifieds? Post it up on a vendor website to make the extra buck. You can also check out other ways to make extra cash online such as teaching English over Skype to interested students. Start your own small business doing something you love such as painting, fixing computers, bike tuning etc.

Category: Back To Basics - FAQsBorrowingDay to Day BankingSavings

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Article by: Anna Suzdenkova

Employed in the financial sector for over 7 years. Held various roles including financial advisor, auto claims adjuster and manager of customer service. Attained an accounting degree with Honours. Mutual fund licensed. Passionate about helping people. Forever an optimist, positivity is the key to a happy life. Enjoys helping people decipher the banking world and use it to their advantage!