There probably aren’t that many people around that could confidently say that an extra bit of money in their bank account wouldn’t make life a bit easier for them. And for many of us, there are small changes we could make in how we deal with our money that could help us reach are financial goals much more quickly.
Maybe your goal is to introduce yourself to a new look and change your wardrobe? Maybe you’re saving for a holiday? Or maybe you’re looking for some extra money to put aside to give your children a head start in life?
We’ve put together some ideas to help you change your spending and save money. To implement these ideas successfully, it’s a great idea to try out some personal finance software so that you can get a much better picture of your financial situation and track your path to financial comfort.
Step 1: Set and Monitor your Saving Progress
When it comes to saving money, it’s easy to think ‘I’ll just buy one less coffee a week’ and ‘I’ll only buy clothes that are on special’. But when doing this, it’s hard to see the long term results and stick to a pattern of saving. So before you even being to cut back on your spending, ensure you have a way to measure the affects of your saving and monitor your progress. One really effective way to do this is to use a budget planner.
Traditional budget planners involved scribbling a few notes on a piece of paper while out shopping. More advanced methods include inputting data into a spreadsheet. But spreadsheet formulas can be tricky to get just right and to be fair, a spreadsheet is pretty boring! Today, there are a few online budget planning tools that are far more useful, way more interesting and much more user friendly.
With a good budget planner, you should be able to safely import information from your bank account with a few clicks of the mouse and then follow some simple steps to set your goals. The budget planner will then tell you how realistic your goals are, when you expect to meet them and exactly how much you’ll need to save and how much you’ll have left over for luxuries each week. Because they are more user friendly and more fun to use, the chances of you using them and staying on track are much more likely.
Step 2: Set and Prioritise your Goals
Once you have uploaded your financial details to your budget planner, you can set your goals and time frame to find out how much you need to save and how much you’ll have spare for non-essential items each week.
You should regularly check-in on your budget planner and refresh your information to see how well you’re going. If you’re doing better than expected, you can choose to either save even more or reward yourself for doing so well. It is important to not starve yourself of luxuries. If you save so much that you have no small luxuries at all, you’re likely to get fed up pretty soon and scrap your saving plan altogether.
Step 3: Look for Extra Ways to Cut Back on Spending
With your budget planner, you’ll be able to categorise your spending into fields such as groceries, bills, transport, entertainment and more. Once you’ve done that, you’ll have a great picture of exactly where your money is going and what areas you can cut back on.
You might find, for example, that you’re spending a lot of money on your bills. Armed with this information, you could contact your service providers and ask them if there’s any way you can lower your bill, or you could contact competitor service providers and see if they can provide the same services for less. If you’re spending a lot of money on transport, you could look at using more cost effective modes of getting around. Perhaps you could bike to work for 2 days a week instead of driving or taking the bus? Small savings in the short term can add up to big savings in the long run.
Step 4: Celebrate your Victories!
As mentioned above, if you reach your goals, or even small sub-goals on the route to success, then you should find a cost effective way to give yourself a small reward. In doing this, you’ll make your saving plan for more exciting and will be able to stick to it more effectively.
This article was kindly supplied by NZS.