Secrets towards a good saving lifestyle
Many people find it very difficult to meet their daily needs in life due to a continues life style. They accuse the government, the economy, and the general public without knowing that the problem is within and overtime they fail to identify their major problem in life but these savings tips will enable you meet your daily needs at all time.
The following savings tips will enable you to be free economically:
you must learn to starve:
many people see the word starving in a negative angle without knowing that starving cuts across the rich, average and the poor.Starving entails cutting unnecessary expenses starting from your fashion, the use of modern technology, the purchase of irrelevant current assets etc…
you must conserve:
In this savings tips, you must adopt the spirit of conservation in your daily life. One thing is to protect your source(s) of income because once you play with your source of income there will be a great bridge in its flow and as such causes you to face a great difficulty in your savings habit and in your purchasing power so you must guard your source of income so well. This also entails you to cut cost, reduce waste and loss so that you will have to save and spend.
you must save:
Having done the above you will now come to the stage where you can save, here you need to visit savings organizations like bank, pension service provider, buying of shares, bonds etc…
Avoidable habits that negates these savings tips
1. Spending Money You Don’t Have:
Spending more money than you make is enabled by spending money you don’t have or money you are yet to earn. You spend money you don’t have by using credit cards and taking out loans, payday loans, cash advances, overdrawing your account, etc.
When you use these methods to pay bills and make purchases, you’re creating debt. If you don’t fully repay the debt each month, it will continue to grow.
You can resolve this bad habit the same way you stop spending more money than you make, by reducing your expenses and relying only on your income to pay for your needs or wants.
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2. Using Credit for Ordinary Purchases
You should use cash (or available cash in your checking account) to make everyday purchases like groceries, gas, clothing, and entertainment. The appeal of credit cards is the ability to pay later for items that you buy now.
Some credit cards have reward programs that let you earn cash, miles, or points by charging more on your credit card. If you choose to maximize your reward earnings by charging more, only charge what you would have purchased with cash and pay off the purchase right away.
3. Going Over Budget:
If you budget like most of us, obeying savings tips you’ll know that sticking to your budget can be tricky but it’s necessary. If going over budget every month is common for you, you probably have a bad spending habit that you need to fix. Otherwise, your budget could be unrealistic.
Going over budget consistently isn’t good because it could mean you’re spending more money than you earn which can lead to debt.
To fix this bad spending habit, start tracking your spending and read just your budget. If you know that you’re spending too much money on dining out each month, your options include increasing the amount for that particular budget category or reigning it in and controlling it better.
You can also try using the cash envelope system for specific budget categories as well to ensure you don’t overspend.
4. Impulse Buying:
Impulse buying is a hard habit to break. It involves making unplanned purchases based on emotion instead of spending mindfully. What’s dangerous about impulse buying is that sometimes you don’t even notice how it can affect your finances.
You may be in a store one day and you see an item that’s on sale or you may be driving and decide to stop by Starbucks and get a coffee. There’s nothing wrong with spending money those ways, but if you regularly make unplanned purchases on impulse, they can really add up and deplete your disposable income.
If you don’t want to spend all your extra money on random nick knacks that you didn’t really even want or need to buy, you’ll have to stop spending on impulse and plan your spending better.
To get rid of this spending habit, you can create a miscellaneous budget category that you stick to for extra, unplanned purchases. You could also try waiting 24-48 hours before you make an unplanned purchase to ensure that you actually need the item and don’t just want to buy it based on a temporary emotion that will leave you regretting the purchase later.
Try simply sticking to your shopping list and avoiding stores that you tend to make impulse purchases in and unsubscribe from mailing lists that send emails that tempt you to buy more stuff.
It’s time to break those bad spending habits and achieve your financial goals instead! with the savings tips.
5. Overdraft/ATM fees:
ATM fees can be another voluntary spending habit that can add up over time and eat into your disposable income. Some ATM’s fees are as high as $4+ per transaction. Banks also make big bucks from overdraft fees. If you’re going into overdraft regularly from overspending, you could be losing quite a bit of money that could be best spent elsewhere.
To get rid of this spending habit, only use in-network ATM machines so you can check your balance and withdraw money for free. If your bank has an app, you may be able to find nearby ATM”s you can use for free while you’re out on the go.
To avoid overdrafts, set up balance alerts for your checking and savings account to notify you by phone or email so you always know what your account balance is. Some banks also have overdraft protection programs where you can set some money aside to quickly fund your account if you overdraft.
All in all, it’s important to make sure you know how much money you’re spending each day and what your account balance is so this is another reason why you should track your spending and check in with your budget frequently.
6. Paying for Services you don’t use:
When you follow the savings tips, paying for something you don’t use will just be like taking your hard-earned money and flushing it down the toilet. It’s pointless. If you have a gym membership, magazine subscription, or any other service that you aren’t using and you have a hard time getting rid of it, you may be in denial.
Sometimes certain products and services sound nice or they’re a trend and everyone is paying for them. Or, you may think that one day you’re going to use them, but that one day never comes because you’re just too busy or it isn’t a priority.
To fix this spending habit, you’ll have to be honest with yourself.
6. Buying Everything that’s on sale:
This is a bad spending habit that can actually be described as a good habit. If you love catching sales and deals, there’s nothing wrong with it but if you make it a habit to purchase everything you see that’s on sale, you won’t actually be saving any money in the long run.
Retailers know that consumers get excited about sales and practically feel obligated to make a purchase just because something is offered at a discounted rate.
However, there are many sales traps that basically trick you into thinking that you’re getting a sale when you’re actually spending more money. Things like BOGO deals, and buy 10 for $X will cause you to spend more money overall.
To fix this spending habit, get really clear on your needs and values. Realize that just because something is on sale, doesn’t mean you need to buy it. If you weren’t considering the item before the sale, odds are you probably don’t need or want it and just want to feel like a savvy shopper who caught a good deal.
Have you ever had any of these bad spending habits? How did you break them?
7. Using Credit When You Have Cash:
Another bad habit is when the you ignore the conservative advice in the savings tips and choose credit over cash when you have the cash. You might want to get the goods (or services) without having to pay for them, but the convenience of holding on to the money in your wallet comes at a cost. Chances are, if you don’t want to pay for it today, you’re not going to want to pay for it tomorrow.
To change this bad habit, you have to be willing to pay for what you want with the money you’ve earned. Realize that while you can postpone payment by using credit, you’ll end up paying more than if you’d just spent your cash.
8. Using Debt to Pay off Debt:
When you use credit cards to pay off other cards and loans to pay off other loans, you’re not paying off anything. You’re just shuffling your debt around and incurring more debt each time you do so.
Balance transfers have transaction fees, and most loans have some down payment or origination fee. So when you use debt to pay off debt, you end up worse off than when you began.
Using debt to “pay off” debt might be beneficial if you can transfer a balance from a high-interest rate credit card to one with a lower limit. However, you have to be careful that the balance transfer fee doesn’t negate the interest savings and that your post-promotional interest rate isn’t worse than your previous rate.
Transferring a balance once or twice to take advantage of a great rate is different from continually transferring balances to dodge credit card payments.