Money Saving Ideas For Improving Personal Finance

By MicaR | Online Venture | 18 Apr 2024

Some of the traditional saving methods include saving in piggy banks, using cash instead of cards, learning to craft to make your own things, cooking instead of buying everything, saving money in a bank, etc. Some of the traditional saving methods still work. For instance, if you make your own things (soaps, for example) and cook your own food, or even grow food, you can save money. However, if you really want to save and if you want to grow your money, most traditional money-saving methods do not help, for example, saving accounts are not very great ideas. 

How to Save Money on Food Bills

You might not realize, food is one of the biggest contributors to your expenses. Sadly, food is essential and you might not be able to cut your food expenses. Is that so? Can you not cut your expenses on food?

Well, there are strategies that will help you save money on your food bills.

Eat home-cooked food: You might have to pay $20 for a pizza if you buy it in a restaurant, however, if you make the same pizza at home, you can make it for half that price. So, you don’t know how to make pizza? You can find recipes on youtube. Your pizza might not be good at first time, but gradually your skills will improve.

Switch to cheaper alternatives: Does chicken cost more than beans in your place? If that is the case, eat beans and save money. Chicken is not the only protein source, there are numerous cheaper alternatives. Do you find cereal more expensive than vegetables, try eating more vegetables. If you want to eat meat try cheaper options, chicken might cost less than lamb. If that is the case use this option.

Don’t eat junk foods or sodas: Avoid eating anything that does not have any nutritional value, for example, junk foods and sodas.

How to Save Money on Entertainment

People need to spice up their lives through entertainment. Entertainment is as essential as food because you need peace of mind to be able to work and live happily and you can do that only when you get entertainment. However, you might not realize entertainment is getting costly and it is one of the biggest contributors to your expenses. If you do not have any financial issues, you might not have to worry about how much money you are spending on entertainment, however, if you have limited income, you need to follow some strategies to save money on entertainment.

Youtube and TikTok: Youtube ad tiktok are two free entertainment platforms you can use. In fact, if you try, you can even monetize your activities on these platforms and make extra money.

Free games: If gaming is one of the biggest contributors to your entertainment budget, switch to free games. Free games are as good as paid games. In fact, the world’s most played game PUBG mobile is actually a free game.

Stream movies: If you avoid going to the cinema and instead watch movies at home by streaming you can save a lot of money. You can even have friends at your home and share the streaming charges.

Don’t Spend Money on These Three Things Before Being Rich

Do you know why a lot of people cannot become rich despite earning well, saving money, and investing money? That’s because the more money they make, the more money they spend. People, who make $3k per month and take a public bus to the workplace, will buy a car once they start making $4k. When they get a pay raise and start making $10K, they buy luxury cars.

If you want to build wealth, you should stop spending money, mainly on these three things.

Expensive cars: People with average incomes buy expensive cars because they want to look rich. Never buy expensive cars until you are rich.

Designer goods: The main customers of designer goods are the people who want to look and feel rich. Don’t try to look rich, instead, stop spending on designer goods, use cheap items, save money, build passive income, build wealth, and become rich to afford designer goods.

Traveling: Stop traveling a lot because you want to post on Instagram and show people that you are rich.

How to Start Saving

In order to save money, you need to cut your expenses. You cannot cut your expenses unless you downsize your life. Downsizing your life means you are trying to live with the lowest possible amount. You also need to cut your expenses on non-essential items as well as the items that you believe to be essential but are not. If you have debt, you should start paying off debt because if you have debt, you might not be able to save money because you are supposed to pay off your debt before you start saving money. You need to save money on regular basis.

There is no such thing as the best time to start saving. You can start saving money at any time, in fact, this is the right time to start saving your money. As soon as you start generating income, you should start saving. A lot of people try to save money that is left on their hands after spending on their bills. When you are using this method, you might not be able to save as much money as you want. Therefore, a better strategy is to save at least 10 percent of your income when you receive your paycheck.

Saving Strategies That Work

If you want to save money but you are unable to save money, here are some saving strategies that have worked for me, and hopefully, they will also work for you.

Start saving when you receive your salary: When do you receive your salary? If you receive a salary in the first week of the month, you need to deduct at least 10 percent from your paycheck and save it in your saving account. You should use the remaining 90 percent to pay your bills and make other purchases. Never wait to pay your bills and save your spare money. Save as soon as you receive money.

Buy term life insurance policy: A term life insurance policy is also a saving strategy that will allow people to have savings. If you pay premiums for your insured term, upon maturity you will have sizeable savings. Since you need to pay your premiums regularly and you cannot withdraw your money until it matures, this will allow you to save money easily.

Limit your expenses to 50 percent of your income: Your bills on essential items like rent, food, fuel, etc. should never exceed 50 percent of your income. if you are spending more than 50 percent of your income, downsize your life to reduce your expenses.

Is It Possible to Build Net Worth Just By Saving?

You will hear personal finance telling you that you need to invest money to build your net worth. But do you have to invest to build your net worth? Can’t you build your net worth just by saving?

Well, it is possible to build net worth through saving. However, you need to follow proper saving strategies.

Save regularly: You need to save regularly. You also need to save for the long term. If you save $100 per month, you will only have $100 in savings unless you save $100 each month for a year to build $1200 in savings. Imagine you saved $100 per month for 20 years, you will have $24000.

Save in interest-bearing accounts: You should not put your money in a checking account where you don’t receive any interest. Instead, put it in interest bearing account. In our country, banks give you 7 percent yearly interest in saving accounts, which means if you keep $100 for one year, you will have $107 by the end of 12 months. However, banks give you a higher interest rate on fixed deposits. In our country, you get 12 percent interest on a fixed deposit. So, if you keep $100 for one year on a fixed deposit, you will get $112 by the end of the year.

Three Types of Savings You Need to Have

Saving money is not enough, you need to save your money on three basic categories. This is to ensure that you have savings for different purposes.

Emergency Funds

You need to save for your emergencies. Let’s say you lose your job today and you do not have any income for the next 4 months. How can you pay your bills if you do not have savings for emergencies? How much money you need on your emergency funds depends on your expenses. But the basic rule for emergency savings is you need at least 12 months of expenses requirement in your emergency funds.

Retirement Savings

When you are too old to work, you will retire. If you are working for corporations or the government, you might get retirement benefits but if you are working independently or in a small company, you will not have retirement benefits. In a situation like this one, you should prepare for your own retirement by saving money.

Saving for Investment      

You also need to save money so that you can start investing. You need to gradually build investment by saving money and investing your savings in different assets. If you do not save money, you might not be able to invest. If you don’t invest, you cannot grow your wealth.

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