5 Money Saving Tips

five money saving tipsImagine the possibilities if you found you had extra money in your monthly budget. Could you finally go on that vacation you’ve always dreamed of? Could you put away extra money for a down payment on a new home? Maybe you’d even be able to pay off all your debt. Regardless of where you’re at on your financial journey, it’s possible to turn your finances around. Here are 5 tips on how to save money on daily and monthly expenses.

Set a budget

Saving money doesn’t mean you have to stop spending altogether. The key is to budget your money. Many financial experts recommend the ​50/30/20 budget​ for smart money management. With this budget, 50% of your income will go towards necessities, 30% to wants, and 20% to savings. If you exceed your set budget in any of your allocations, adjust your spending in high spending categories to fit the formula.

Throughout the month, get a receipt for everything you purchase. Organize the receipts into categories like restaurants, groceries, entertainment, and personal care. At the end of the month, you’ll be able to see where your money is going and which categories you’re spending high in.

Build an emergency fund

An ​emergency fund​ is a bank account where you set money aside to cover unexpected expenses such as major car repairs, emergency room visits, appliance repairs or replacement, and even unemployment. An emergency fund can keep you afloat in a time of need without having to rely on credit cards or take out loans. Financial experts recommend having enough money in your emergency fund to cover three to six months’ worth of living expenses. That way if something unexpected were to happen, such as getting laid off, you could use the money in your emergency fund to pay for necessities while you look for a new job.

When building an emergency fund, set a monthly savings goal. This will help get you in the habit of saving money regularly and will make it a less daunting task. Another great way to build your emergency fund is to set any unexpected money you earn aside such as your tax refund or any money you receive as a gift. After you’ve saved for a few months, check your account to see your progress. Adjust if you need to add more. This is especially important after going through an expensive life event such as marriage or a medical emergency that caused you to dip into your existing emergency fund.

Shop at secondhand stores

A great way to save money on brand name items, especially clothing, is to shop at secondhand stores. Many financial experts recommend spending no more than 5% of your monthly income on clothing each month. Shopping secondhand is a great way to fill your closet with brands you love while staying within your budget. Thrift stores like, thredUP, are making it even easier to shop secondhand by offering their selection of clothing, shoes, and accessories directly online. They offer ​an affordable selection of your favorite brands, including Madewell​, that you can score for up to 90% off retail price. Not to mention, shopping secondhand also has a positive impact on our planet!

Follow the 24-hour rule

Have you ever made an expensive purchase only to ask yourself days later why you bought the item? You may have even found yourself not using the item as often as you expected. This is where the 24-hour rule comes in handy. Before pulling the trigger and making a big purchase, spend 24-hours thinking about how passionate you are about the item. By waiting, you’re reducing the item from a “need” to a “want” and can more easily walk away from buying it. Not only will this help you save more money, it also helps avoid purchasing expensive or unnecessary items on impulse.

Eat out less

The average American spends ​$232 per month eating meals prepared outside the home​. If you find yourself eating out frequently, try reducing the amount you eat out to just once per month or on special occasions only. Instead, prepare your meals in advance and stick to a grocery list. People who grocery shop with a list, and buy little else off the list, spend significantly less money than those who decide what to buy once they get to the grocery store. This alone could save you hundreds of dollars.

The next step is yours

Regardless of where you’re at on your financial journey, it’s possible to turn around your finances. It all starts with your mindset. Setting a budget and making small changes to your spending habits is the first step in the right direction. What step will you take next?

Quote of the Day

When it’s obvious that the goals cannot be reached, don’t adjust the goals but adjust the action steps.

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