Best Financial Advice for People Who Wants to Save Money

Best Financial Advice for People Who Wants to Save Money

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Saving money is not easy. At first look, it appears to be. However, when it comes to actually saving, it is pretty challenging, especially if you don’t have a stable income. You already know that you need to save a little money for your future. Retirement costs a lot, and you need money for that.

You need money in case of emergency, for kid’s college education, and the list goes on. At the back of everyone’s mind, they know these expenses is a tough challenge and will only get worse as time goes by. If you have not started saving money for your future, you need to ask yourself, how can you start?

When will you start saving money? For most people, how to start saving is the most difficult part. Reading this article is a good start if you have trouble taking the first step. We asked some financial advisers and compiled a list for advice on how to save money to help people that need financial advice.

Always track all your expenses

Billy Xiao, an engineer-turned financial adviser and the mind behind WealthMobius.com says that some adults have no idea on how to handle their money and their expenses. But if they take time to measure it, theythink that they can improve it. That’s why it is essential to track all your finances and make a list of how much you are saving.

You need to identify expenses that are considered as “low-hanging fruit” or costs that you can afford to cut. You have to start making some progressive goals to increase your savings. You can visit websites like Mint.com or YouNeedABudget.com to track all your financial expenses.

The first thing you need to do when you want to track your finances successfully is to recognize and understand that there are different kinds of costs: subscription and one-time expenses. One-time expenses are expenses that usually happen once. They don’t happen again over time.

For example, you walked by an ice cream parlor and decided to buy one. That is considered as a one-time expense. It can be a huge deal, especially when it comes to your bank statements. One-time payments can eat away your money if it happens frequently. But these kinds of expenses are easy to follow since you are making the purchases manually.

Because you are aware of the things that you buy, it is easier to recognize, the expenses and formulate a solution to the problem.

(Do you want to track your expenses? Click here to know more about applications and software that can help you properly track your monthly expenses.)

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Subscription expenses are expenses that keep coming back over time, either weekly, monthly or yearly. It includes power, water, and cable bill, or the rent for your house. You signed up and use the services, so you expected to receive the bills for these expenses.

The cost of these expenses may or may not be fixed. Subscription expenses are very tricky. Sometimes, it is easy to justify subscription expenses than the one-time expenses. For example, if you are in a cell phone store looking for a phone and services, you found a phone that costs $900 that comes with a plane that will cost you at least $50 every month. You also found a phone that costs $300 with a plan costs at least $85 every month.

Let’s say you will use the phone and the service for at least four years. Which phone will you get if you want a good deal? While most people will be enticed to get the device with the lower a price tag. The more expensive phone will be a better deal if you are thinking of using it for four years. If you use the phones for four years, you will pay $2,400 for the more expensive phone.

On the other hand, the phone with the lower price will cost you $4,080 for four years. The best thing to do is to calculate which of the two items are the best deal in the long run. Not only it will save you a lot of money, but you will also save money if you do it on other items that you buy shortly.

Automate it

Once you established a specific budget and a long-term goal, one of the best ways to achieve that goal is to set up an automatic savings account straight from your pay slip or your checking account. It is a good practice that will help you pay portion in the near future. To solve this problem, you need to check software and tools that can make your life a little easier. Tech tools like Digit can decide how much money you can save every month depending on the salary you are receiving and money you are spending.

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