Piggy Bank Looking Empty? Here are Five Tips on How to Save Money

Saving money is not as easy as everyone hopes it would be. Sticking your money under a mattress is not going to get you anywhere. Spending less is part of the challenge, but there is a lot more to it than just that. Here are some ideas and tips on how to save money effectively.

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• How To Save Money

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1. Pay off Your Debts as Soon as Possible

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It is extrememly difficult to start saving money when you already have existing debts. Calculate how much per month you are spending on your debts, be it student loans, mortgage, credit card, whatever. Eliminating that monthly expense means you can repurpose that money into savings. The sooner you pay off those debts, the less you will have to pay in interest in the long run. Paying off debts completely can be difficult for many, but debt consolidation is one way to decrease interest payments and make payments easier.

2. Set Goals

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Set short and long term goals for yourself. Really emphasize those long term goals. A good way to jump start serious money saving is to set a goal of buying a house, moving, or building a retirement fund within the next few years. Come up with a total monetary amount you will need to save by the date and calculate how much that means you need to put away per month or week. Setting a goal may be the kick in pants you need to start taking your money habits seriously.

3. Calculate Weekly Expenses and Income

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Before you can start seriously considering your ideas for saving money, you need to get a vision of your regular expenses. Add up everything you spend on, gas, food, entertainment, etc. versus how much you make per week. Whatever is left over is how much you will be able to realistically save.

4. Cut Out Needless Spending

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Once you have an idea of how much you are able to save per week or month, you can put that number against how much you want to save to reach your long term goal. If you are coming up short, the only real way to add to that weekly savings is to cut down expenses. Sure, you could get a raise or a better paying job, but that is way easier said than done. What you can do is calculate how much of your weekly expenses are things you can live without, or you can find cheaper alternatives to. Get down to the bare minimum if you want to maximize savings.

5. Stop Using Credit Cards

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One of the best saving money ideas is to cut up those credit cards. Having credit cards available is a huge temptation to spend more. Unless you are able to pay off the bill in full each month, all you are doing is creating more debt for yourself.

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Knowing how to save money is an art many of us fail at often. But with careful planning, setting goals and always being cognisant of what your money is doing, you can start to build funds. We all struggle with saving money sometimes, but hopefully these tips can help you head in the right direction.