Living a financially comfortable lifestyle seems impossible nowadays, with rising prices of food, housing, education, transportation, and other expenditures. If you’ve been trying to save up for retirement, a present for a loved one, or any other purchase, but still can’t seem to save up enough despite the 60+ work hours clocked per week and the Chinese food that lands on your table every other night, here are five great frugal finance tips.
Grasp Onto a Plan
Why grasp and not make a plan instead, you might be wondering? A lot of people make an attempt to concoct the most brilliant of budgeting plans, but after a few days or weeks tops, they end up brushing off the plan in exchange for a responsibility-free way of handling finances. Grasp onto any financial plan you can. List expenses and income on a piece of scratch paper. It doesn’t have to be a journal or book solely dedicated for budgeting.
Set Up Automatic Transactions
Whether it’s monthly electricity payments or working off an outstanding balance, set up accounts to automate transactions on a monthly basis. This will free up time and effort, allowing you to focus on more important itineraries. It also avoids any payment delays and penalty fees charged to your accounts. If you can, set up these payments to pay more than only the interest on your balance each month. Paying only interest is like throwing money away, it doesn’t reduce your debt or help you reach your goals.
Look in Between the Cushions
Literally, there can be extra cash lying around the house. Aside from loose change and dollar bills, you might also find items of some value, such as an outdated wristwatch, power tools you don’t need anymore, and memorabilia that has lost its sentimental touch. You can bring it to your local scrapyard to exchange for some money. Some places, like U Pull & Pay, will even take whole cars for their parts.
Have a Savings Buddy
If you’re doing some budgeting for a family, your spouse will likely be the best savings buddy. For individuals, a trusted friend is ideal. A savings buddy will help you stay motivated and on track to accomplish your financial goals. They will also help you avoid the temptations of impulse purchases by reminding you whenever you feel the urge to do something detrimental with the money. They will check in with you from time to time to see if you’re meeting your finance goals. A good savings buddy will be someone you can call before you make an impulse purchase, and they’ll be able to talk you down from it as well.
Being frugal is not enough. You’ll need to grow your savings if you want to have a shot at retiring before 65. Invest in high-yield, low-risk assets including stocks, bonds, and real estate. Putting the money you have lying around into an investment account protects it from yourself. Locking your money away can remove the temptation to use it, making sure that it’s always working for you and appreciating in value. Don’t buy into “beat the market” hype. While a few individuals may be able to have a return on their investment higher than the market itself, most people, even professional account managers, are unable to do so. Some economists have even shown that a portfolio of randomly picked stocks perform almost identically to a portfolio chosen by market analysts and professionals. If you want to be frugal, don’t pay someone to manage your portfolio. There you have it—five easy but powerful ways to save money in today’s economically challenging climate. To maximize savings, don’t limit yourself to these five tips. Explore other options for making or saving cash.