The one rule you need to know to save money
Times are tight for a lot of us at the moment, but these simple saving tips can really help
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Whether you’re worried about work falling through or are feeling completely secure in your job, it’s never a bad time to get on top of your money. While we might all know that we should be saving for the future, that’s even harder in hard times. How is the best way to save money?
Budgeting may not be the most exciting task in the world but it’s the first rule of making your money go further. It’s simply a matter of adding up all the money you have coming in and the amount going out. You can do this on paper or a spreadsheet, and there are even free budgeting apps out there.
The idea of the 50/30/20 rule is to spend 50% of your income on essentials, 30% on optional items, and put 20% away for savings or paying off debts. Now granted, for a lot of us this simply isn’t possible, with more than 50% of what comes in being swallowed up by essentials. But the plan still serves as a helpful guideline at the sort of split you should be looking for.
Essentials First, you’ll need to work out the family’s take-home pay and halve it. That’s your first 50%. Then add up what you’re currently spending on essentials: mortgage, food, clothes, utility bills and so on. How does this compare to that first 50% figure?
Desirables According to the plan, 30% should go on ‘desirables’. Of course, at times that can seem like a bit of a pipe dream. But if you are able to set it aside on months with special occasions like birthdays, then that’s great. And remember, the ‘desirable pot’ isn’t just for others. You deserve the odd treat and luxury just as much as they do.
The other bit Finally the bit that no one likes – until they see the benefits: the 20% you’re putting away. Even if you can’t put away 20% each month, just setting aside what you can means you’ll soon build up for emergencies or those special occasions.
Other tips on how to save money
Here are a few practical ideas for you.
- First up, hit the grocery store less frequently. Your wallet will definitely thank you.
- Second, curb your cravings for eating out and whip up something delicious at home instead. It’s amazing how much you can save by not ordering that avocado toast every morning.
- Consider buying less new, expensive, and trendy clothes. Sell the old ones you don't wear anyways, and strut your style without breaking the bank.
- Unsubscribe from unused subscriptions. You don’t really need that magazine subscription for decorating ideas you never follow through.
- Spend less on entertainment. Instead, get creative! Try a game night in with friends or a picnic at the park.
- Spend less on transport! If your car is burning a hole in your wallet, consider taking public transportation or cycling to save gas money.