Money saving tips
Why is it so hard to save money? People come to me asking for how to save money. Let me share few easy tips you can start using from today!
Tip 1 - Budget
Budgeting is … boring. But it’s super important. If you don’t know how much you are spending on what, it’s impossible to see where you can save extra money. What I do personally is creating a table in notes on my phone. I just list out expenses and add a total at the end. Mine looks something like below. I go check the expenses almost every day to make sure I have enough in my account. Also, I double-check my expenses to make sure I am not exceeding the budget.
| Expense | Amount |
|---|---|
| Rent | 1000 |
| Auto loan | 400 |
| Car insurance | 80 |
| Health insurance | 100 |
| Utilities | 150 |
| Phone | 50 |
| Internet | 40 |
| Food | 150 |
| Miscellaneous | 100 |
| Total | 2070 |
Tip 2 - Limit yourself with cash
Many people struggle to control themselves because they use a credit card to pay. Yes, credit cards are good and can help you earn points. Those points can be something you can put towards Christmas gifts for kids. However, they are often so evil that you spend more than what you have in the bank account. Yes, that happens!
If you do budget, you should know how much you are spending on grocery, clothes, etc. every month. Make an upper limit like $300 for food and take out $300 in cash. Seeing money in cash makes you cautious of how much you are spending. If you happen to spend less, that’s awesome. Put it back into the bank account!
Once you become frugal enough, start using a credit card. If you have one that helps you earn points, that’s great! My Capital One credit card gives me a 2% reward for grocery shopping and 3% for dining so I expect to earn at least $36/year from grocery shopping/eating out ($1,800/year).
Tip 3 - Think long term
When I buy something more than $100, I ask myself “Is this worth it?”. To me, anything more than $10 is expensive. Especially things over $100 are super expensive. When I bought my macbook pro a long time ago, it was about $1,200. However, it was well worth it because I still use it to date. It’s been almost 10 years. I had to change the battery and HDD but those didn’t cost any more than $200.
In short, buy things that last for a long time. If you buy a $500 laptop that last 5 years, it’s $100/year. However, if you just look at the price tag and buy a $300 laptop, which only last for 2 years, it’s $150/year. Also, you need to consider the performance too. You may end up buying a new expensive one because what you bought isn’t up to expectation.
Also, if you are investing in stocks, $100 into stock(s) can be $1,000 in 5 years. Most of us don’t make millions of dollars so we need to be considerate of our spendings. Always, make sure to invest some of your spendings in something which will grow over the years.
Happy saving!