Knowing how to save money is one of the most important lessons to learn in life – and one they don’t usually teach in school. Yet implementing a money-saving action plan will hopefully allow you freedom, peace of mind and, in some cases, the realisation of your goals.
Whether you have a specific goal in mind, or if you’re simply trying to save for a rainy day, learning how to save more money is at the top of the priority list for many households.
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So, what are the easiest ways to save money? Read on for some useful money saving tips…
Know the rules: How you choose to save money is dependent on a variety of factors, from your household income to the assets you currently have to your name, to the stability of your work situation and the size of your monthly overheads. Different methods of saving work for different people, but here are a couple of rules that can frame your mindset and develop habits that save money:
The 30-Day Rule:
What is the 30-day rule? Simply put, if you feel the itch to buy something, wait 30 days. Take the money that you were about to spend on said item or activity and set it aside. Don’t worry! It’s there. All you have to do is wait for it.
By forcing you to evaluate your purchasing motivation, many people find the 30-day rule to be one of the best ways to save money. It prevents impulse purchasing, and allows you the psychological space to really consider what you do with your money. Of course, this method only applies to non-essential items.
The 50/30/20 Budget Rule:
What is the 50/30/20 budget rule? The 50/30/20 budget rule is about ensuring that you have enough money for essentials while not negating the need for life’s pleasures. This is how it goes:
- 50% of your income goes towards necessities. These are the things that you need for your day-to-day survival. Think rent, groceries, electricity, water, etc.
- 30% of your income goes towards your “wants”. This might be dining out, a weekend away, those belly dancing classes, or that band you’ve wanted to see since you were a teenager.
- 20% of your income goes towards long-term savings or repayment of debt. This can include things like your retirement fund, your kids’ education, or paying off an overdraft.
Use a monthly Budget Planner: That old adage of “those who fail to plan, plan to fail” is particularly true when it comes to saving money. Designing a budget – and putting it into practice – is essential for setting aside funds for the future. But this is easier said than done, and it can be a challenge to keep track of a budget.
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