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Saving Strategies That Work

By MicaR | Online Venture | 19 Apr 2024


Generally speaking, you can save money in two ways, one you save a certain percent of your income and maintain your life with the remaining money; and two, you save whatever is left in your hands after paying your bills and spending on essentials.

If you ask me which one is a better strategy, I will say the first one, where you save a certain percentage of your income. This strategy will help you control your spending and make your saving mandatory. You need to save money for two reasons, one, to have an emergency fund when you need it most, and two, to invest in something that will give you financial returns.

If you want your money to work, can save money in three ways:

Investment funds: You need to save money so that you can invest in your desired market when you have a substantial amount. For instance, you can save $10 every month for one year and when you have $120 by the end of the year, you can invest in the stock market, or any other market of your choice.

Emergency funds: You need money for emergencies. The basic purpose of saving money is to manage your life during emergencies. A lot of people lost their jobs during Covid Pandemic, and those who had emergency funds managed to pay their bills even when they did not have an income source.

How to Start Saving Without Sacrificing Your Desires?

You need to save money because without saving you cannot build your assets. However, most of the time, saving also means sacrificing your wants and wishes. Is there a way to start saving without sacrificing your desires?

Yes, there is a way to save without killing your desires all you have to do is manage your cash flow in a proper ratio. You need to divide your budget into three categories, one, important expenses (food, rent, bills, etc), your wants and desires (things you desire, a smartwatch or a smartphone, for example, or going for a vacation, dining in a restaurant), and, three then your monthly saving. You can follow the 50:30:20 strategy for your budgeting. When you have set 50 percent of your income for your necessities, make sure you strictly spend within that budget range. If you have set 30 percent for your wants, make sure your spending is under 30 percent, if that is not manageable, wait until you save money for your luxury budget. Likewise, strictly follow a 20 percent saving strategy.

In order to save money, you need a proper system of cash flow, you can do this only when you do budgeting and strictly follow your budgetary policy.  

How to Save Money on Grocery Bills

Here are my strategies to save money on my grocery bills:

Shop when there are discounts and promos: The grocery store in my neighborhood offers 10-15 percent discounts on vegetables and fruits every Wednesday, therefore, I buy vegetables and fruits only on Wednesday and manage to save some money. My grocery store also offers cash back when my bill exceeds a certain amount, therefore, I always try to pass their discount threshold.

Discounted products: Depending on the manufacturer and the expiry date a lot of products come with discounted rates, so I try to buy those products. 

Buy local: I buy local products, and I try to avoid imported products. When I buy local products, I can not only save some money (local products cost less) but also help the local businesses. 

Unbranded products: I also don't buy from the brands, I buy unbranded products. Buying brands does not necessarily mean you are buying the best product, brands are charging extra money just for the brand name, therefore, when I buy unbranded products I manage to save a lot of money. 

Buying in bulk: Sometimes buying in bulk also saves a lot of money. However, before buying in bulk I make sure that the product lasts long.

Reasons Why They Tell You to Save Money?

Do you know who runs the world?

Communists, capitalists, or socialists do not run the world, rich people run the world and rich people have built banks to collect money. They tell you to save money. Since the banks are offering some returns on your saving, you are likely to save your money in the bank instead of keeping it at your home. Banks then use their money to build wealth by investing in businesses and industries. When you want money, you will be charged a higher interest rate, however, when you save money, you are given peanuts. Then, they also tell you to buy a house, a car, etc. When you start buying houses and cars, you are buying liabilities and you will.

When you save $1 the banks will lend $10. They tell you to save money because they can use your money to lend 10 times.

So, instead of saving money in banks, you need to invest your money. Instead of saving money in banks, you need to borrow money from banks. Whether the money is the money you have saved or the money you borrowed from banks, you need to use it to buy assets that can build you an income.

Three Reasons Why Saving Accounts Are Scam

Do you know why they tell you to save money in banks? They tell you to save money in banks because they want you to become too dependent on the banks for your everyday needs.

Actually, saving accounts are scams. Saving accounts have been so normalized that you don’t even realize that it is a scam anymore.

A lot of people hoard money in saving accounts because they believe it is the safest option. However, the result is just the opposite. When you save money in saving accounts, it will lose value due to inflation.

If you have saved money in banks you have realized that you are not allowed to withdraw a large amount at once. That’s because they don’t want you to invest money. Contrarily, they are investing your money and making a lot of profits.

You have saved your money in the banks, yet the banks charge you fees for various services. They are taking your money and they are charging you fees.

How to Save More

Given the current economic climate and inflation, you need to save as much as you can. Most people can save only 5-10 percent of their take-home pay (after tax deduction or provident funds cut). However, considering the increasing expenses and the emergency funds we might need in the future, 5-10 percent saving is not enough. So, how do we save 20 percent or even 30/40 percent of our take-home pay?

Here is a simple strategy.

Make a list of your expenses and categorize your expenses into categories like necessities, wants, and luxuries. You cannot cut your necessities because you need them to live. You might also not be able to cut your wants because that’s how your life becomes interesting, however, what’s the role of luxury in your life, when you do not have enough savings for the future. Even your expenses under the wants category can be cut for certain months. You might also adjust your necessities by switching to cheaper alternatives for food or moving to a cheaper neighborhood.

How to Double Your Savings

If you want to save more, here is a simple way to start saving even when you are living on a low income.

Export income and expenditure data from your bank or credit card so that you know everything about your cash flow.

Now make a few categories such as housing (rents, mortgages, insurance, utilities, etc.), food (grocery, outdoor eating), transportation (fuel, insurance, tax, plane tickets, cabs, etc.), health (gym, medication), entertainment (movie, subscription) shopping, self-development (books, courses, etc. ) miscellaneous. Once you have done that total the amount you spent on each category. Now you can see how much money you are spending on different things. From there you will have to think about how you can cut your expenses.

In order to start cutting your expenses, you will have to make another category that includes shouldn’t have (something you purchased that you regretted), nice to have (something you like to have but you can live your life without having), have to have (something you need to enjoy life which other might consider useless), essential (something you cannot live without).

You can start cutting your expenses based on the list you have prepared. This kind of categorization will help you understand where you should stop spending, or where you should start limiting your expenses.

Saving and Investing to Improve Your Net Worth

Some people say you need to have at least 12 months of your monthly expenses on your emergency funds. In other words, if you need $1000 to pay your bills, you need $12000 in your emergency funds. Once you have that amount, what should you do with your money? Well, there are a lot of answers to this question, you should save money for your retirement. When you have retirement savings, you will not be in financial trouble even in your old age when you cannot work. You should also use your money to make investments in different markets for financial health.

The Purpose of Making Money

Do you know what the purpose of making money is?

Well, the obvious answer is to pay for your cost of living. If you have additional money left after paying your bills, what should you do with your money?

Money is for saving and investment and not for wasting. Money is too valuable to be wasted. Money should be saved and invested.

What is the purpose of saving and Investment?

When you save money, you will have money when you need it most. Let’s say you encountered an accident, you need money for treatment. If you have savings you can pay your medical bills. Let’s say you want to buy a house, if you have savings you can buy a house.

When you invest money, your wealth will grow. When your wealth grows, you will be able to live comfortably. Building wealth means you are financially secure. When you are financially secure, you no longer have to bother about money.

Therefore you should not waste your money on watches, expensive devices, or luxury brands. If you are spending $1500 on an iPhone, $1200 on Gucci bags, and $1500 on Prada shoes that’s stupid. What you need is money, you need means to make money so that your net worth grows.

Why Should You Save and Invest Money?

After spending money on essentials like rent, groceries, fuel, and loan repayment, what should you do with your remaining money?

The answer is simple, you should save money. You should invest money.

What should you save and invest money in?

When you save you will have money when you actually need it, and when you invest your net worth will grow. When your net worth grows, you will become financially stable.

When you invest, you will also have cash flow because the investment will provide you return on your investment. When you have cash flow, you will be able to enjoy life.

You might get a feeling of being rich when you use luxury brands but that does not make you rich. You will become rich only when your net worth grows. Just because you use an iPhone and wear an Armani suit does not make you rich. You will become rich when you have an investment portfolio. You are rich when you have assets.

You might not have a lot of money to invest, but if you save money regularly and if you invest your savings regularly in a long run your portfolio will grow and you will become rich. If you become rich you can start doing what you missed in your early life.

Saving or Investing? Which is More Important?

When you save money, you will have money when you need it, for example, you will have money during your emergencies.

When you invest money, your wealth will grow and you will be financially secure, and you will also have money to buy assets.

If you have money, you should do both, and focus more on investment instead of saving That’s because you don’t get many returns on your saving but your return on investment is much higher. If you build your investment, you can also sell off your assets when you need money most.

However, if you have limited money, what should you do, invest or save?

The first priority should be given to saving. When you save money, you will have money for your emergencies. If you managed to build sizeable savings, you can also save your money in high-yield saving accounts or make less risky investments such as mutual funds, bonds, fixed deposits, etc.

If you have limited money but still want to start investing, the first step to investing is to save money. Without saving money, you cannot start investing. If you cannot save to invest, you can start investing with whatever you can manage by using a micro-investment strategy.

 

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MicaR
MicaR

Web Designer and Content Creator


Online Venture
Online Venture

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