Today I am sharing some of my favorite money saving tips that I live by and find incredibly helpful!
- Budget Mind Tricks. For this you need will need to have a checking account and a savings account. It’s a little mind game that you play with yourself to avoid overspending.
Calculate your total income vs. your total expenses (if these change month to month, then calculate on a monthly basis). Depending how much you have left over each month allowing yourself a small cushion for miscellaneous spending (around $100). The rest of the money should be moved into your savings account where it can accumulate interest. This way, when you go into your bank account balance and see that there isn’t much in your checking account, you won’t be inclined to go on a spending spree.
Your savings account should have a safety net. This is an emergency stash that you never allow yourself to go use until it’s an official emergency. (Ideally, it would be worth 6 months of expenses, but in today’s day, I can understand how that is difficult to do.) I would suggest a good amount would be anywhere between $1,000 and $5,000.
Once you decide to start a savings plan, do not buy anything outside of your every day necessities until you have reached that set safety net amount. Once you reach the safety amount, you can continue saving for something else and only then use that extra money. Ex: Your safety net is $1,000 and your dream vacation costs $2,500. Don’t go on that vacation until you have a total of $3,500 in your savings account.
- Credit Cards. Credit cards are great. However, my general rule of thumb is to never spend more than you can pay back immediately. I strictly use my credit cards as a way to maintain a good credit score. It is not necessary to open a credit card at every single store that you shop at. Pick one or two main cards (Visa, Mastercard) that have excellent perks for your lifestyle (money back, mileage, gas rewards). If you are not someone who travels often, then you probably don’t need that card that will give you mileage. If you are still feeling like you need some extra credit, I would only allow yourself a maximum of 5 additional credit cards for department stores – and that is really pushing it. Chose the stores that you will shop at long term, frequently and are used more as a necessity. Revert back to #1. Don’t spend more than you can afford!
- Cash Back Websites & Apps. If you must shop, make sure you get cash back whenever you can! Look for websites that offer you coupon codes as well as money back. My favorites are Ebates and Retailmenot. (Ebates will offer a percentage, while Retailmenot may offer a flat amount paid depending how much you spend. Make sure you calculate which website offers the greatest return for your purchase.
I’ve also started using Ibotta and Checkout51 for cash back after grocery shopping. The grocery apps are a bit more tedious for my liking, because you need to go line for line on your receipt matching the item to what is available in the app. In the end, it’s still worth getting a few dollars back.
- Put That Cash Back Money Into A High Interest Online Savings Account. Open a separate high interest online savings account. This should be an account that you don’t intend to touch unless it’s absolutely necessary. Whenever you receive money back from the websites/apps listed above, throw it into your separate account. It’s a few dollars that you would typically forget about, but when you put it into a separate account that you don’t use, those few dollars can double in no time.
- ALWAYS Question Yourself “Do I Really Need This?”. Every now and then it is great to treat yourself to a special shopping day. But it is also so easy to get carried away with your spending, so much so that it can become an addiction. So before you buy something ask yourself :
“Do I really need this?”
“How often will I really use it?”
“Is there something more practical that I can spend this money on?”If you need to question it, then you probably don’t need to be buying it!