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Today I have a guest post from James Paul. James is a personal finance blogger who writes at Basic Finance Care covering everything about debt management, frugal living, credit cards and money saving tips. Enjoy!
6 Ways To Save More Money & Reduce Financial Stress
Did you know that saving a $100 dollar every month can leave you with an extra $100,000 for your retirement?
This seems like a very easy job especially for developed countries, where average annual income is around $50k. Then why there is so much financial stress?
Studies have found that people are saving less these days. BBC reports that more than 16 million people in the UK have savings of less than £100; which means if they lose their jobs, they will be unable to afford their lives almost instantly.
The wealthiest countries are going through financial stress. Living expenses are taking a psychological toll. According to the Organization for Economic Cooperation and Development, on an average Americans save 4.5% of their income, while Europeans saved nearly 8%. Here are some of the ways in which we can increase individual savings.
#1 Planning ahead and buying in bulk at discounted price
Planning is a great way to organize your life, time and money. You can plan for a week, month or even a year ahead. For example, I plan my meals on a weekly basis and shop accordingly. This helps me with grocery shopping and saves time spent cooking since I already know what I’m going to make. So, no more last-minute groceries shopping as I already have everything I need to cook.
I make a monthly list of all the household items, toiletries, etc. and purchase them in bulk. I also plan my holiday almost a year ahead; this gives me time to visit the best places in the world at best possible rates.
Related: 8 Ways To Avoid Grocery Store Creep
#2 Reuse to eliminate waste
Buy things that last longer rather than the use and throw ones. Focus on buying products that are refillable or reusable.
- Reuse everyday items like glass jars, cans, newspaper, plastic containers, and clothes.
- Make compost out of household waste and grow your own garden
- Join Pinterest app, as it shows many creative ways of saving and reusing.
#3 Save on fuel by riding a bike
Riding a bike is easy, safe & healthy and helps in saving on fuel. Avoid using your car, or if possible get rid of it. Ben Stanley from IBM says-“Owning a car today feels like a burden to many people,”.
Owning a car can be stressful if your vehicle expenses are more than fifteen percent of your monthly income. A recent study shows that on an average 30% of household income goes to home loan or rent, and if other 15% goes in the car then, almost half of the salary goes towards home and vehicle.
#4 Automate savings
Prioritise paying yourself first. Save a percentage of income at the beginning of each month rather than saving what’s left at the end. For example, immediately deposit 10% of your income on the first day every month. It is better to automate this saving by setting up automatic transfers with your bank. This will leave less money in hand, eliminating unnecessary expenditures.
Related: 5 Methods I Use To Stay Out Of Debt
#5 Sign up for any free customer rewards program
Sign up to every organization with a customer rewards program free of cost. This is a great way to know about sales and ensure you’re getting a good deal. Many retailers reward their customers for shopping at their stores. Banks also have such programs, they offer cash back if you shop with their card.
To ensure you get the best out of these programs subscribe to their mailing list or newsletter. Keep an eye on emails, for a discount or extra coupons and shop accordingly.
#6 Avoid unnecessary expenses
Too many people spend money they earned; to buy things they don’t want and to impress people that they don’t like. -Will Rogers
The following is a list of potential expenses to avoid:
- Cut your cable – Stop paying a monthly cable bill. Instead, watch your favorite show or movie on the internet.
- Cut your gym membership – Gym membership itself can help in saving $50-$80 per month. There are many pocket-friendly alternatives to Gym.
- Socialise more at home and avoid partying at restaurants/bars – partying out increases entertainment and food expenses. No matter what the occasion is partying at home is always cheaper. Call your friends and family and have them come over. Prepare a home-cooked meal and play games or watch a movie. This will ensure fun with a budget-friendly party.
- Avoid fast food – carrying your own meal will ensure you don’t buy unhealthy food when you’re hungry.
- Quit smoking- It is good for your health and pocket.
- Purchase items such as dish soap and laundry detergents in concentrated forms.
- Shop second-hand or samples.
Every small change can help you save a lot of money and increase your financial freedom. Adopting these habits can reduce your anxiety and stress level and make a comfortable life.
Following chart features what will happen if you save 100$/month.