Developing an extensive money-saving plan can be beneficial to your financial well-being. Not only will it help you gain control over your financial planning, but it can also allow you to start living within your means, making it easier for you to reduce your debt. Let’s take a look at 5 tips that you can use to save money more effectively.
Stop unwanted subscriptions
In an ideal world, you would go to the gym, read your weekly trail running magazines from cover to cover, and derive a ton of value from lifestyle subscription boxes. When your goal is to save money, the first thing you should do is to cancel all subscriptions that you don’t need to survive or to generate an income. If you are subscribed to, say, a bookkeeping service to help you keep track of your finances, chances are that the subscription cost will result in more savings. If you are already married, on the other hand, a bridal magazine subscription is an unnecessary expense.
Install a VPN
Installing a Virtual Private Network can have numerous benefits. VPN’s create anonymous connections through a private IP address to ensure that you have all the online security and privacy you need. It also helps you gain access to content that is only reserved for designated geographical areas. VPN’s also saves you money, since you can switch servers and countries until you find the best streaming service. This means that you have access to a broader range of content with only one subscription and without having to adhere to time limits. Another benefit is that installing a VPN on Fire TV or Firestick is easy and takes almost no time.
Draw up a budget
This is the most obvious tip for saving money, but it’s also the most crucial. One of the best ways to budget is with the 50/20/30 guideline. According to this guideline, you should divide your monthly income after taxes into three categories. 50% of your monthly income takes care of all your household expenses. These expenses include rent, groceries, and utilities. 20% of your income should be used for all your financial priorities. These are things like paying off debt, saving for retirement or starting a business, or to pay for a cruise.
The remaining 30% of your income is used for unplanned expenses. These can include paying the vet or going out for dinner and a movie. Of course, you can make your own percentages, depending on your income and needs.
24-Hour rule
The 24-hour rule will help you to prevent impulse buys. Whenever you are shopping, be it online or at a mall, you should take 24 hours before checking out or paying for an item. If you see a luxury item or something that you haven’t planned on buying, it is important that you give yourself some time to decide if it is something that you truly need. Usually, a day is enough time to cool down and get out of spending mode.
Pay with hours worked
Before buying an item, calculate your hourly wage. If you see a rug that costs $100, and you earn $10 an hour, ask yourself if you would have been willing to work 10 hours to get the rug. This will give you some perspective on your spending habits and help you see the real cost of buying something. It will also force you to evaluate your need for a specific item. If you really want to buy a luxury item, it will also help to wait and work consciously toward buying something, rather than paying with money that is already in your account.
