The good news about being frugal is that it can save you money, no matter how much you make. The bad news about being frugal? It sometimes seems like the savings never quite make up for all the sacrifices you have to make along the way! But, when you get frugal right, you can enjoy more spending cash than ever before while spending less time and effort making more of it. Here are ten ways to help you stop losing money so that you can start saving more of it!
1) Separate your cash into envelopes
Give yourself an envelope for each category of expense. This will help you to prioritize and keep track of how much you’re spending on each thing. Don’t write checks from these envelopes, though. Write your checks directly from your bank account instead so you can see exactly how much money is left in your budget at any given time. You’ll be less likely to spend it frivolously if you have to watch it carefully. If you want a physical representation of what’s left in your budget, consider putting that cash into a piggy bank or other type of container. That way, when it comes time to pay bills or buy groceries, you can physically take out what you need without having to think about where that money went already.
2) Make use of direct debits
Direct debits are a great way to pay bills on time. Having set up direct debits, you won’t have to worry about forgetting to pay your utility bills or other regular expenses. It’s easy to get in a habit of paying bills late and racking up unnecessary fees and charges as a result. Direct debits avoid these additional costs by ensuring you don’t forget any payments by paying automatically from your bank account each month. If you do find yourself struggling to make ends meet at times, try setting up an alert with your bank so that they can remind you when payments are due.
3) Don’t Overdraft
Overdrafting your account can lead to costly fees and interest charges. Set up a direct deposit at work, or set aside money in a separate account specifically for overdrafts. If you do find yourself in a bind and need to take out cash, don’t use an ATM—and never use another bank’s machine if your own is empty. Instead, call a customer service representative and ask for an advance on your balance. You’ll be charged a fee, but it will likely be cheaper than paying for an overdraft.
4) Set up a savings account
You may not think setting up a separate savings account is a big deal, but doing so will prevent you from splurging and will establish healthy savings habits. Please check your account from time to time to make sure nothing’s gone wrong. Successful saving is done with automation, so don’t become negligent! Even if you think you can easily juggle having two accounts, once you’re six months in and you think of transferring those few dollars over to the other account, you won’t be able to help yourself. Your goal should be to have six months worth of living expenses in your savings account at all times.
5) Use Bank Of Mum And Dad
The people you love are also great sources of advice and financial support. The Bank of Mum and Dad is great for those who want to start a business or purchase property. It’s also a good idea to ask family members if they have an accountant. Hiring someone who knows how to handle your finances is ideal when it comes to making money decisions and avoiding spending unnecessary funds on things you don’t need.
6) Give Yourself An Allowance
As humans, we often have a hard time limiting our spending. Giving yourself an allowance will help you keep track of your spending and will prevent you from overspending. There are countless ways to handle your money, so set a budget that works for you and stick to it! It’s better to be safe than sorry. Make sure to leave room in your budget for expenses like car maintenance, haircuts, and clothing purchases. If you want something expensive or new but don’t want to risk breaking your budget, consider saving up before making a purchase instead of splurging on credit cards. Think about what kind of financial situation you want to be in five years from now, and make decisions today that support those goals.
7) Break The Habit
No matter how hard you try, it’s impossible to break a bad habit. Yes, you can temporarily mask your addiction by shifting it to something else—pumping your extra energy into running or knitting or yoga, but eventually you’ll slip back into your old routine. The key is not to eliminate that addictive behavior, but rather retrain yourself so that it’s no longer harmful.
8) Stick To A Routine
It is easier to avoid spending money if you know exactly how much you have. You should therefore track your spending with a personal finance software or by hand. The last thing you want is to be hit with an unexpected expense and not have any money left over in your account to cover it. Keeping tabs on where your money goes will allow you to anticipate expenses, like car repairs, before they happen and put aside money for those surprises that are inevitable in life.
9) Get used to the feeling of being richer than you are
Sometimes it’s hard to tell when you have enough money. As soon as you get paid, you spend what you need for bills and food—and anything left over goes directly into your fun account. The problem with relying on fun money is that it can make it difficult to feel like your savings account actually contains any real cash. Get used to feeling rich by re-thinking how you budget.
10) Get Your Free Personal Finance Guide
Many people struggle with their personal finances, but they don’t have to. In My Personal Finance Guide you will learn how to master your finances through practical tips and simple strategies! Learn how to find free money for everything from home improvement projects to paying off your debts! Click here to download your copy now. There are a lot of reasons why people struggle with their finances: maybe it’s due to a lack of knowledge or simply because we are all human and make mistakes.