Many people struggle with money simply because they lack the skills to manage their finances. Unless you’re one of the lucky few to have someone to teach you the basics of personal finance, chances are you’re one of the millions of people who don’t have savings, have minimal savings, or have made bad investments.
Or maybe you’ve read a few self-helpfinance books and the occasional article here and there. But many of these self-professed money gurus make it seem more complicated than it is. You don’t need to know everything about finance to save money. Small actions often lead to significant results, and with a little discipline, you can start saving for your future.
Whether you want to save for a vacation or you’re looking for personal loans, an organized approach to your money can help you make better financial decisions.
Here are a few tips to get you started.
1. Focus on high-interest debt
If you’re saddled with debt, paying them all off can seem like an impossible task. Start by listing down all your creditors, such as your student loan, auto loan, and your credit card. Rank them by balance and interest debt. Focus on paying off your loans that charge the highest interest rate.
Many financial advisors will tell you otherwise, but in many cases, unloading high-interest debt is your smartest bet. Paying off high-interest loans first saves you more money down the road. The sooner you can pay off your loan, the less interest you’ll have to pay.
2. Set aside money for your wants
If you find it too difficult to stick to a budget and find yourself overspending on unnecessary things, then you may have to change your approach to budgeting. Many people fail to stick to a budget because they don’t allocate money for their wants.
By setting aside a third of your income to discretionary spending such as dining out and shopping, you’re more likely to remain motivated to save money.
3. Use cash
Reduce your reliance on your credit card and start using cash for everyday purchases such as groceries. This doesn’t mean you should stop paying with a credit card, however. Save it for rent and bill payment.
The idea is if you only use physical cash, you’re less likely to overspend. This is a great way to reduce your spending if you’re the type to make impulse purchases. Of course, this would only work if you have a budget.
4. Cancel your subscriptions
But not all of them. If the company has an excellent membership management service and provides you with additional incentives and promos, keep it. Only cancel subscriptions and memberships that you do not use. Remember that gym membership you signed up for months ago but never used? You’re still paying for it. Doing this will save you a lot of money in the long run.
More and more services are switching to a subscription model, and you’ve probably signed up for a few. If you pay for three streaming services but only use one, it’s probably time for a digital cleanse. Check your email inbox and cancel all the subscriptions you don’t use anymore.
These four personal finance tips will help you save more money. You don’t have to follow them right away. Start by focusing on realistic strategies, and once you’ve gotten used to a disciplined approach to spending, you can then incorporate more personal finance techniques into your daily life.