Debt is a growing concern for many American families. By the third quarter of 2021, the consumers in the US had a debt of $15.24 trillion. People are now wondering how to deal with credit card debt since it is one of the highest interest loans.
The answer is by saving money and then using it to pay off your debt. But with rising inflation, how can you save money? Well, don’t worry because we will be discussing a few money-saving tips you can start today. Let’s get right into it.
Money-Saving Tips that you Can Start from Today
Savings can come in handy during difficult times. You can use it to deal with any unforeseen expenditure to deal with a blip in your spending pattern while saving yourself from going into more debt. Here are some of the money-saving tips you can start following from today.
1. Create a Budget
Saving money without having a budget is simply impossible. If you are finding ways to save money, you need to know how much you are making and how much you are spending. That is only possible if you have a realistic budget in front of you.
Having a saving plan without a budget is like a body without a soul. It helps you find the balance between your income and expenditure to allow you to save money. Also, it is highly recommended that you update your budget once a year or every time your financial situation changes.
If you are getting a raise or looking to start a side hustle, you can update your budget accordingly.
2. Keep a Record of Your Spending
If you are looking to save money, you must figure out all the areas where you are spending it. Many people don’t track their day-to-day spending and end up paying more for some particular items. You need to live below your means to save money.
Therefore, you need to check and record every time you purchase an item, go shopping or make any other transaction. Your bank and credit card statements can be useful to help you understand your spending habits.
3. Bring Down your Debt
One of the best money-saving tips is to reduce your debt. The additional money you pay in interest rates drains your finances. You will get stuck in a loop where you cannot pay your debt off and end up with no savings as well.
That is why you need to find ways regarding your credit card debts and know how to consolidate payday loans. Since this debt has one of the highest interest rates among all other types of loans, it will be best to get rid of it first.
4. Make a Robust Saving Plan
People aim to save money, but they don’t have any real plan. If you want to increase your savings, you need to have a realistic goal that you can achieve. You can either set aside a small percentage of the income you earn or a minimum amount to save each month.
Also, it is better to have incremental savings goals where you gradually increase the amount you are saving. It will help you save money while increasing your savings at a fast pace.
5. Cut Down your Expenses
Another great money-saving tip is finding ways to bring down your expenses. They take up a large chunk of your expenditure, and if you can reduce it, you will have an ample amount of money to save.
You can also check and cancel those subscriptions you don’t use. You can opt for a cheaper package and consider giving up on a few entertainment items. In addition, it would also help to lower your energy bill by turning off appliances when they are not in use.
6. Make use of Cash Back Rewards and Coupons
If you want to save money while spending on your favorite item, you can do so by utilizing cash back rewards and coupon codes different brands offer from time to time. These promotional offers are a great way to save money on groceries and clothing.
Also, wait for sales so you can purchase your favorite items at a discounted price. It will be a win-win situation for you since you will be saving money while buying your favorite item.
7. Use the 50-30-20 rule.
Finding it difficult to save money? Then, you can use the 50-30-20 rule, which helps you set aside money for your savings while enjoying your favorite things during your leisure. If you go by this rule, you will be spending 50% of the income on your necessities, which include things like groceries and rent.
The 30% of your income will go towards your fun and entertainment like going out, shopping, etc. With the final 20% of your income, you can either save it or invest it somewhere else to generate an extra income.
The best part is you can tweak it as per your financial needs and lifestyle. So, if you want to save 30% and leave the rest 70% for your necessities and entertainment, you can do that as well.
8. Look for the Best Deals
There is no harm in preferring a particular brand’s product. However, it should not stop you from looking for other options available. In a hyper-competitive market, you can always find different brands offering the same thing at lower prices.
The same is the case with your dry cleaning and grooming services.
Although you will be saving a tiny amount, if you add up these little savings on multiple products, you can save a couple of thousands extra by the end of the year. Therefore, make sure you keep an eye out and look for the best prices for any products.
Saving money is no rocket science. With these easy money-saving tips, you can build a substantial emergency fund to help you deal with an unforeseen expenditure. Most importantly, saving money is directly proportional to bringing down your debt.
Reducing your debt will give you extra cash to save or invest. Your priority needs to be about how to deal with credit card debt, as it takes a big chunk of your income. Therefore, make a budget and include a saving and debt reduction plan in it.
About the Author: Lyle Solomon has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California. He has contributed to publications such as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue, and many more.