As the holidays draw nearer and nearer, most people are experiencing the giddy highs and lows that accompany holiday shopping. Whether or not you and your family go all out with the purchasing of goods for one another, this time of year still probably includes an extra investment of cash that has the potential to properly sting.
If you’re beginning to feel the holiday financial pinch in such a way that it has you contemplating your need to start saving money once you get to the other side of the current buying extravaganza, the good news is that anyone learn to save money — even if you’ve never been good at saving before or you have a very tight budget. And it doesn’t have to feel terrible either. From using cash to cooking more for yourself, here are a handful of practical ways you can save money.
1. How Much Money Do You Really Make and Spend?
People aren’t always completely aware of the true value of their paychecks. Are you one of them? Sit down with your last six months’ worth of paychecks and calculate the average you bring in each month. Figuring your income this way will take into account extra weeks of pay, unpaid time off, and the like. Once you arrive at what you make each month, start documenting what you spend.
Write down every dollar, every donut, every coffee, and every pack of gum you purchase for an entire month. Then, have the courage to look that spending squarely in the face. Do you buy $25 a week on specialty coffee drinks? Does your habit of running by your favorite boutique every other weekend cost you $200 a month? Get intimately familiar with the amount of money you earn and the amount of money you spend so you can start saving with accurate knowledge.
2. Draft a Budget and Stick to It
Once you know the amount of money you actually bring in, and the current rate of spending you enjoy, you’re ready to draft a budget and implement it. Put down the non-negotiables first: mortgage, utilities, cell phone, car insurance, car payment, health insurance, food, school loans, gas, etc. From there, start reigning spending in.
Let’s say after you’ve calculated all your non-negotiable expenses, you’re left with $500. Choose to set aside a decent amount of that for savings and investment — at least $250, but more if you’re currently without any savings at all. Allow yourself a certain amount of cash for entertainment and fun, but cut out the extras and devote that spending to your savings plan. Don’t be too strict with yourself at first. By allowing yourself treats and luxuries now and then, you’ll be more likely to stick to your budget and save, whereas extreme self-denial can cause you to fall off the savings wagon completely.
3. Use Cash
Credit cards are great — for credit card companies. From getting into high-interest debt to keeping us unaware of the amount of money we are spending each time we swipe it, a credit card is a gateway to financial woe for most people. Instead of credit cards to make purchases, use cash, debit cards and checks.
This practice will ensure you only spend what you have, and you’ll also have a more tangible and tactile relationship with spending money, which will aid you greatly as you try to keep spending in check in order to save money.
4. Stop Eating Out
One of the easiest ways to save money is to stop eating out. According to Forbes, the average American spends almost $1000 a year just eating out for lunch, which means brown bagging at work is one of the easiest ways to save. Going out for dinner also adds up over time to an amount that is often in the thousands of dollars, which means that in order to properly save, you need to spend more time in the kitchen.
Dust off the cookbooks or hit the Internet’s food sites. Good, healthy, affordable, and easy recipes abound. While there can be a bit of a learning curve to cooking, by the time you’ve saved your first thousand dollars from not eating out so much, you’ll be well on your way to being a favorite home chef in your family and friend group.
5. Invest in Your Retirement
Investing in your retirement is an essential way to save money. Not only will it ensure you have a nest egg for your later non-working years, but most retirement investment plans will compound what you contribute to them, so you’ll actually earn money while you’re saving it. From opening a Roth IRA to keeping your 401(k) current, investing in your retirement is something every worker needs to be doing.
So, stop the excuses and delays. You can save money like a miser and never feel like one by following these easy tips.