For many people, learning how to save your money is one of the biggest problems that arises. With bills, personal time and all of the delights of life, saving money can be hard. Even when there is extra money, it is often gets spent because individuals simply don’t understand how to save money.
One of the simplest ways to save money is to put it somewhere where it cannot be accessed. Short term CDs, bonds and accounts without a card attached to them are all good options. Choosing to do this through a bank makes the money grow for an individual. Setting the money aside physically does not accrue interest.
However for many people, setting money aside physically is one of the better ways to save. A jar where all of your change goes can lead to a very hefty level of savings. This can be bolstered by only spending cash on everyday purchases. Not having access to a card makes money feel more real.
You should try and avoid using a credit card as much as possible. Debit cards come with a hard limit of whatever is in your account at the moment. Credit cards do not have such a limitation. Credit card bills and the interest that they stack up are a good way to lose money over time. Instead, save up for large purchases and get them with cash or a debit card.
If you are going to use a debit card, choosing one that has cash back rewards can be a way to save a small amount of money. Some cards offer 1% back on all purchases. This nominal amount can be then put into a savings account or used to cover bills. This small savings can actually add up over time.
Sit down and establish a budget. A basic spreadsheet can be used to input all bills, spending habits and cash inflow. Organizing this information can tell you exactly how much money you need to live comfortably over time. Everything that goes over this budget can then be saved.
Looking at money in a different way can also help you save. Instead of looking at money as a resource, look at it as a measure of your time. Take an item’s cost and divide by the number of hours it would take to pay for the item. If an item costs 4 hours of work, but you feel that you would only get two hours of enjoyment, then this is not a good investment.
Overall, learning how to save your money can be an easy process full of small little changes. Putting the money gleaned from these small changes into a money bearing account of some form can then make that money work much harder for you. Keeping up with this process for months or even, years can result in a savings that is quite significant.