Having money stored away safely while you manage your daily expenses is one of the best feelings in the world. Some people save money for specific reasons like making a down payment on a car or house while others do it for retirement or peace of mind in case of an emergency. It is great to know that you can fall back on your savings if you have medical bills, you need to travel for an amazing opportunity, or you happen to lose your job.
Trying to save money on a tight budget however can be very frustrating. You feel like you do not enjoy the luxuries in life and you have nothing left over for a rainy day. You may feel hopeless when it comes to saving money and simply live from pay cheque to pay cheque.
But, have you ever noticed that whenever an emergency arises, you suddenly find a way to pull through? You either allocate your money for expenses differently or you borrow it from someone and pay it back as soon as possible. If this happens to you, then why is saving money so hard? Here are 5 simple tricks for you to save money and make your life a whole lot more comfortable.
5 simple tricks for you to save money
1. Cut back on expenses
This may come as a surprise, but some of the expenses you have are really not things that you need. If you have more than one TV, cable, air condition units, incandescent bulbs, a water heater, or water pump, then you can cut your electricity bill drastically by living without these things. You can also replace a high-maintenance vehicle, prepare meals at home, and find cheaper forms of entertainment to save money.
2. Hold off on upgrading
Another way to have cash to save is to change your mindset when it comes to upgrading things. Having the latest of everything is a lifestyle choice and not a requirement. If you have a functioning phone, car, TV, game console or wardrobe, you can survive without a new one. Saving money is far more important than looking good and impressing friends so think about your future before you think about upgrading.
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3. Set aside a fixed amount
Once you have reduced your unnecessary spending, you are ready to set aside a fixed amount of money to save. Make a realistic budget that covers all your basic needs and make plans for the remaining money no matter how small the amount. Hide at least $500 a month if you have a small salary. Aim for $1,000 if your income allows it. This type of saving has absolutely no risks except you being tempted to spend it before it accumulates. Control yourself and save money wisely.
4. Invest in trustworthy opportunities
You can also save money by putting your earnings in a low yield, low risk, long-term investment plan that has a guarantee on the initial investment. Many financial institutions offer different plans that allow you to store your money with them for a long time and get interest on it. Talk to a reputable financial advisor about an investment package that is suitable for your needs.
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5. Take a loan to save
Taking out a loan from a financial institution to save money is an effective way to ensure that you stick to your plan. The interest that you pay on the loan may sound unreasonable if you think you could save money on your own. However, if you still have no savings, then the interest you pay is worth having a fixed deposit full of money in the end. Here is what to do. Save money and open a fixed deposit. Use it to secure a loan for almost the same amount for 6 months. Add the borrowed money to the fixed deposit. Pay back the loan within the period and reinvest it. Do this repeatedly.
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