Financial opportunities are everywhere and it may come at anytime of your daily life – be it when you are ready or not ready. How do you take advantage of this? Sometimes you may be faced with great inconvenience – you needed medications, car broke down, or annual education fees. How do you prepare for this? It’s not rocket science, you have to prepare your savings – cash is king. Here are the 5 simple ways to save money.
1. Apply auto debit/ standing instructions
Every month I have set an automatic debit or as known as standing instructions (SI) which takes away a certain portion of money from my bank account. You would have to arrange the SI service with your associated banks. The best thing is the service have no fees at all! Simple right?
You can have the banks to take away your money at a specific date. So if your salary will come in every 29th of every month, you can have the bank to debit your bank account on the 1st of every month – just make sure you have enough money in your bank account. I would normally have the bank debit my bank account and transfer those amount directly into my compounding bank account. Why is this great? Not only does it feel less painful to save (because the bank’s do the savings for you) but you will be able to save and invest at the same time. Your money is growing every month in your bank account through compounded interest, you get yearly dividends, and to top it off – you make money while you sleep!
2. Withdraw only what you need at start of every month
This is a type of control I set for myself everytime I received my salary every month. I will withdraw fixed amount of cash that I deem necessary for that month – based on my monthly budget. For example,
Car fuel – $ 300
Families – $ 300
Foods – $ 300
Total = $ 900
Hence, based on the example, every month I withdraw $ 900 beforehand and stick very hard to the cash I have withdrew. The balanced money in my bank account will be splitted into savings and the other portion will be maintained in my salary bank account in case if I needed extra cash.
3. Have a piggy bank
Everyday I have allocated the maximum amount of money I can spend. Let’s say one day the maximum I plan to spend is $ 15 only and at the end of the day I still have $ 2 – I will put that $ 2 in my savings box.
This strategy actually helps as another filter on top of other saving strategies I have applied. At the end of the day I will deposit all the money in the savings box into my bank account. Well, it’s actually up to you – you can also try and buy good foods for your family or even give to charities. As the saying goes, giving to charity makes you richer. Do not wait till you become rich to start giving, give until you become rich.
4. Be your own chef, cook your own meal
I have been applying this for one year now and guess what? It is unbelievable how much money you can save! I try hard to cook my meals at home and bring it to office the next day.
I noticed that cooking meals that consists common ingredients saves lots of money and time – it’s a good time management technique. For example, cooking meals that have chicken and broccoli or fish for straight 3 or 5 days and switching ingredients every 1 or 2 days. Imagine if you can save $ 200 every month, that’s $ 2,400 a year!
5. Buy what’s necessary, spend little on wants
Sometimes you need that caramel frappe from Starbucks or that banana buzz from Boosts – go for it, buy it! It’s always alright to spend an extra something each month to make you happy, something that helps motivate you to work harder. Consider it a reward for yourself. However, try as much as possible to limit yourself and avoid overspending on things that can cumulatively cause financial leaks to yourself. You may not need to eat at that luxury restaurant every week, try around once a month. Another way to look at this is to buy on things that won’t burden you such as buying a house that is within your comfort financial zone – not a property that caused too much strain on your financials. All and all, save as many as you can while you can and leverage the savings into assets that can grow you money.
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