Saving money can often cause stress, but it can be easier than we all think. A small amount saved every week can make a big difference over the course of a year. In this post, we shall look at the best ways to start saving money next year.
Now that another New Year is upon us, you might want to change your financial situation and start saving money for the future. The easy way to save more money next year is to follow a few smart tips that will work towards your savings goals.
You don’t always need to wait a while to save a good amount of money. It can be an achievable goal if you focus on understanding your finances. Before you begin your money-saving pursuit, you should first understand why saving money is so important.
Saving Money – Why is it so important?
Most of us already know that having a good savings pot enables you to be less stressed during emergencies or with unexpected household bills. But there are other reasons you need to focus on building your financial reserves.
Let’s look at a few reasons why experts are so adamant about building an emergency fund:-
- Just because you are focused on saving money doesn’t mean you need to give up on having fun. You feel more excited to save money once you realize you can use some of it to do things you love.
- Financial stress is what many people want to avoid, no matter what. Whether it is because of emergencies or situations we never saw coming, the one thing you don’t want to worry about then is money. You can completely bypass that stress by saving money smartly.
- Big purchases are inevitable, especially when you have a large family. You will often need loans to by these necessary items, but saved money can help you avoid that. That way, a good amount of saved money will see your more relaxed when you have to deal with a big purchase.
- It becomes simpler to imagine a better future for your loved ones when you know you are saving enough money for them. You won’t have to worry about future struggles, student loans or emergencies as you have already started preparing for them.
- You will feel in a great place if you are more financially independent. Most of us want to reach a point where we no longer need to depend on someone for our financial needs. Saving money is an essential step towards achieving that financial freedom sooner.
How To Start Saving More Money Next Year
Knowing why saving money is paramount, you might also wonder where to start. To build my emergency funds, what are some of the things that might help me out? Or, if you are already saving, you should learn to save more in the upcoming year.
Let’s start talking about some of the most popular and best ways to save more money that you can also try out:-
Evaluate your personal finance position
It’s only possible to start saving money if you know where your money comes from and where it goes. Understanding your finances is the first step towards creating a budget that helps you save towards your financial goals.
So spend at least one month observing and noting the flow of all the money that comes to your household. A good option is to repeat this for 2-3 months to gain a better understanding of where your money is going and how you could spend less money.
Your monthly incomings and outgoings will make the most sense when you have researched them for a couple of months. Some bills will need to be paid on a monthly basis, where other bills may take an annual payment.
The better you know and understand the monthly flow of your money, the easier it will be to devise a savings strategy that will work for you and your family.
Automatic transfers can help achieve your long-term goal
One of the issues people have with savings is that they often forget to put the money in their saving account. Automatic transfers can help with that issue as you no longer need to put the money away explicitly. These transfers, or standing orders, can easily be set up in your online banking account.
Setting this up might take time as you need to decide how much money to put aside and how often you want to do it. But once the setup is ready, you can easily forget about it, as you will not struggle to set aside saving money every few weeks.
You will avoid the disappointment of failing to save money if you do this as you will not need to set yourself any reminders.
You should write a plan before grocery store shopping.
Research has shown that people often tend to overspend while grocery shopping. The main reason for overspending is that you feel tempted to buy more than you need when so many options surround you. Especially when shops make their weekly deals so bright and appealing.
Here are a few things you can do to avoid overspending on your shopping:
A good place to start if your pantry. Go through this and make a detailed list of things you need. Put them in order of what you actually need and what can be an extra purchase.
Items such as laundry detergent will most likely be one of the most expensive buys, so check out alternative brands for lower prices or get busy cutting out discount coupons.
Allow yourself a little room on the budget to purchase additional items.
Look for online coupons and discounts that you can take advantage of when grocery shopping.
Little things like these will enable you to stick to your budget when you buy groceries. It will also allow you not to feel guilty whenever you spend spare change on things that were not on your grocery list.
Avoid Online Shopping Whenever Possible
Saving money has become so difficult because everything is so much more accessible with online websites. You don’t need to leave your house to get anything you want, and it often takes a few button clicks.
So when you wish to save money, one of the easiest yet most challenging ways to do it is by avoiding online shopping as much as possible.
It might not be possible to stop shopping online altogether, but you can limit it. A good idea is to avoid saving your card info, so you will have to enter it whenever you want to purchase something.
You can also set up an online shopping budget to help you restrict unnecessary expenses. Start doing some of these things to see if you can be more thoughtful about your online purchases.
If you have money left over at the end of the month, even after putting savings away, you could treat yourself to a little treat.
Wait a certain amount of time before you make a purchase
Often when there is something that interests us, we end up buying it before our mind can even understand if we need it or not. This is known as impulse buying. Though buying something at first glance is okay if you like it, you should still wait for a moment before making the decision.
We suggest waiting before you spend the money, especially if you are spending money on a large purchase. You should walk away from that product for a few hours before coming back and seeing if you want to buy it.
This is a great way to give you time to consider all options regarding the purchase, before buying and then regretting the purchase.
If you still feel like you need that product, feel free to purchase it. Otherwise, consider not spending money in that moment. Giving yourself the extra time before buying is always a great idea
Get rid of unnecessary subscription services
You will often see this recommneded, as cancelling unnecessary subscriptions is one of the easiest ways to save money each month.
Whether it’s cable tv that you do not watch often, or a monthly magazine subscription that you do not actually read. Consider cancelling these and look for the best deal on these items elsewhere if you really do need them.
But in the long run, we need to analyze if we need to subscribe to something that we use only two times a month in the last year, such as Amazon Prime. If you are currently paying for many subscriptions, consider doing the following activity every few months to help save a little money inbetween.
We suggest listing your current subscriptions with recurring automatic payments and write down exactly how much you use them. Try cutting out a few of them that you have not used recently.
Subscriptions are very convenient as they are easy to set up and a monthly treat landing on your doorstep is a short fix to cheering you up.
As easy as they are to setup, the majority of subscriptions are also very easy to cancel. If you really cannot live without them, then either do not cancel, or cancel for a short time before starting when you do need them.
Tracking your money should be taken seriously.
It may not seem like tracking your money will help you save much money, but it is the best way to stay on track. Knowing constantly where your money is at that moment will enable you to notice when you end up getting off track.
You can limit yourself if you see that you are spending too much. Luckily, tracking expenses has now become incredibly simple using online tools to aid your financial planning for the future.
Also, you can allow yourself to spend on something you love if you see that you are still under budget. That drink from your local coffee shop will taste all that much sweeter!
These small changes to your habits will make your finances much easier to manage when you have a clear view of everything. So take advantage of the latest applications and resources to help you better your financial decisions and save more money in the future.
Be Realistic and Patient with your saving goals
When setting your saving goals for the next year, ensure that you set an attainable goal. Looking at your current finances and spending habits, you will get a good insight into how much you can save.
Take that into account when you sit down to write down your goals. Doing this will enable you to set saving goals that won’t stress you out too much in the future.
Ensure that you are gentle to yourself every time you don’t manage to save as much as you want to. Saving money is for the long term and is not a sprint. Allow yourself to relax on days when you can’t save money due to emergencies or unexpected expenses such as home repairs.
Being nice to yourself can ultimately help you save money and become financially independent.
Making Long-Term Goals
When considering your retirement savings, there is a lot to think about. Check the current interest rate of your bank and others to see if you can arrange a good savings rate.
If you can save a little extra money at the end of each month and transfer to a retirement account, you will be able to watch your nest egg grow.
Why not set up an automatic transfer of a minimal amount each month and top up when you can. A good way to save the most money is by not withdrawing from the account.
Speaking With Financial Advisors
Saving money for a deposit to buy your first home can seem like an uphill climb. Though it is very beneficial to speak with financial experts who are best placed to offer advice on saving money.
They will need to know important things such as your regular incomings and monthly payments to better understand your financial situation.
If you have high-interest debt, a financial advisor will be able to suggest the best way to clear this so that your financial position looks healthier. A good credit score is something that most lenders will look for when you are applying for a mortgage.
Sit Back And Watch your savings grow
You will get a lot of satisfaction out of watching your savings grow when looking at your bank account. Remember that you have done that!
By being financially savvy and not touching your savings, your money will continue to increase, taking you steps closer to your savings goals.
The best time to start saving money next year is now!
There are so many things to do, from budgeting, to not wasting your money on unnecessary monthly bills and setting savings goals for the future. The money-saving tips above are a really good place to start on your jouney to becoming financially self-sufficient.
Saving money may seem like a chore, but really, the good news is it is quite easy. You just need to make a few changes to your spending habits, though after a few months, you will not even notice the changes you made when you put your budget in place.
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