How Much Cash Should You Save Every Month?
With each passing day, expenses such as food, fuel and other living costs in general are going up at an alarming rate. Merely putting some cash aside for a rainy day is not sufficient. There are so many costs to be covered per month such as mortgage repayments, utility bills, etc. that people sometimes have to take up two jobs to make ends meet.
However, this can be avoided if you start to spend a little more sensibly from now. Take a look at these tips:
- You need to know where your money is going, so keep a detailed record of every expenditure, be it small or big. At the end of the month, sit down and analyze how your income has been spent so you can find out where to cut back.
- It is always better to be prepared in advance. Set up an emergency fund to cover expenses for at least 3 months if you are suddenly out of a job. This is all the more applicable if you work on contractual basis.
- Save on petrol and gas as much as you can. Don’t use your car at every given opportunity – use public transport for traveling to work or carpool if possible.
- Eating out might be the easy way since it doesn’t involve the effort needed for cooking, but you can actually save hundreds of dollars every year by not spending it in fast food joints and restaurants. It is fine to dine out sometimes but don’t make it a habit.
- Pay for all purchases in cash – avoid using credit cards all the time. This will instill an urge to pay for items you can’t afford and in the process you end up with more debt. If you have somehow landed in credit card debt, work on reducing or stopping nonessential expenditures. Clear off outstanding balances as soon as you can, beginning with the ones with the highest interest rates.
- This might be a little unconventional, but you can change your television, phone and/or internet package. Try to go for cheaper plans as opposed to your current deal. The amount of money might seem small initially, but can amount to a decent sum over the months.
- Home insurance payments are an important part of monthly expenses. Conduct a little research to find out if your coverage is sufficient or you are actually paying more than what is required. People often discover that they are paying money for protection that is not relevant to them. Alter your home insurance plan accordingly.
You must have a figure in mind, up to which you plan to save. To plan it in a more accurate way, enter your income and other details in a financial calculator, so you know the exact amount to be put aside.