Learning how to save money the right way leads to greater savings.
If you learn how to save money the right way, you’ll experience the thrill of more money in your bank account. You’ll also notice that your savings habits last longer, which leads to even more savings. But saving money the correct way isn’t always easy and takes a lot of discipline. If a money saving technique sounds too good to be true, it probably is. Below are some of the ways you can save money for long-term cash accumulation.
Cut Back on Unnecessary Purchases
The right way to save money starts with cutting back on wasteful spending. The trick lies with what constitutes “wasteful” or “unnecessary.” Defining these words will come down to your mindset, financial needs, and savings goals. But the best way to decide what is unnecessary is to determine how important it is to you.
For example, do you buy coffee on your way to work each morning? Why? Is it because you want to drink it or you need the caffeine? If it’s the first reason, then it’s an unnecessary purchase. If you need the caffeine, it can still be unnecessary because there are other ways to get your caffeine, such as making coffee at home or purchasing a lower cost beverage or food that provides the same amount of caffeine.
You can even take it a step further and ask yourself why you need the caffeine. Is it because you work a second job in the middle of the night? If so, then the caffeine is necessary. But if it’s because you like to binge watch television shows on Netflix at night, then you don’t need the caffeine at all. Speaking of which, you probably don’t need that Netflix subscription either.
The coffee hypothetical demonstrates how your specific situation will help you determine if something is unnecessary or necessary. If you sit down and think honestly about what you buy, you’ll discover that there’s a lot that you can classify as unnecessary. And at the same time, what might be unnecessary for you could be truly necessary for someone else.
Make Saving Automatic
Saving money is hard and spending it is easy. So to make saving a bit easier, you should make it automatic. And the best way to do that is to create a habit of it. For example, if you automatically save a certain percentage of your paycheck each pay period no matter what, then it will soon become a habit. And before you know it, you’ll have a sizable savings account you can be proud of, and you won’t even realize you’re saving all that money.
To make the savings even more automatic, you can find ways for the savings to take place without your intervention at all. You can do this by setting up automatic transfers between accounts at your bank. You can also have your employer withhold more money for tax purposes, which you can then receive in one lump sum when you get your tax refund. The problem with this tax withholding method is that you’re giving an interest-free loan to the federal government and when you get a big refund check each year, you may feel a powerful urge to spend some or all of it.
Look for Free Money
This sounds like a gimmick or quick fix, and it can be. But when done right, it can serve as a great way to save money. You can find free money almost anywhere: from coupons on items you purchase anyway, to credit card offers where you get cash back for purchases made on your credit card. There are even unique websites that give you cash back if you let them track what you purchase, or if you click through their site before making an online purchase.
Many of these free money strategies can turn into money pits if you misuse them. For example, getting two percent cash back on your credit card purchases is free money. But not if you use it as an excuse to buy more unnecessary stuff or carry a balance on the card each month. This can lead to throwing money away in the form of interest payments to the credit card company.
Visit your nearest Title Tree store for more tips on spending less – or if you need a little help making ends meet right about now.