It’s a big misunderstanding to think if you make a ton of money each month than you are on the safe side. While earning a lot of money helps, what will help you, even more, to live better is to have some positive saving habits. Saving is the most important if you want to reach financial independence!
In this blog post, I will uncover 7 awesome “save money live better” ideas to help you achieve a better life.
Let’s jump into it… 🙂
Table of contents
Here’s my 7 ways to “save money live better” 🤩
➀ Define a saving goal ⚔️
Having a clear goal will make the process of saving much easier because you have a measurable point to aim for.
The saving goal depends on the current situation. I suggest you follow my 7 steps plan to financial freedom and have goals that support your current step.
Slowly you can increase your savings rate to reach the goals faster. This can happen with small changes every day and with the goal in mind.
Saving is generally neglected in society and people tend to postpone it for later in their life. Please don’t do that if you want to live better.
Reaching saving goals can enable you to live better in multiple ways, such as:
- Be more stress-free – Since you have built an emergency fund.
- Feel better – Feel good about buying expensive house items, car or even a home, hassle-free and debt-free.
- Keep your money – Being debt-free means that you will not give a portion of your money to the bank in the form of interest and other fees.
- More freedom – The ability to reach more financial freedom by having money aside and invest.
After you have made the first saving goal, then let’s break down your income to make it happen. This is the next tip:
➁ Break down your income
Break down your income by assigning a certain percentage for different things and be disciplined to stay in the defined portions.
Why budgeting matters for your financial health?
Budgeting is a practical way for you to see how you really spend your money and how you allocate your income across different activities.
For instance, by maintaining an up to date budget, you will be able to estimate your savings level as well as to keep track of your spending habits.
This can help you to spot potential non-value spending activities easily. For instance, if you see that you regularly buy coffee and a snack before you go to work, you can consider to start making it at home or buy snacks during your weekly trip to the grocery store. You have the opportunity to identify potential expenses that are eating up your income.
The process of keeping a record of your income and your expenses will create a better discipline when it comes to managing your money. Instead of compulsive buying of expensive items or items you don’t need, you will consider purchasing a specific item in terms of whether you really need the item or not. Moreover, maintaining a record of your finances can help you manage your debt better and avoid taking unnecessary debt.
The envelope method
One technique you can use here is the envelope method which is a budgeting technique. In essence, you create multiple envelopes where each envelope represents a certain item and you divide your money in the different envelopes.
For instance, you may have an envelope for groceries, for utility, eating out, fun, savings, taxes, etc. and keep in mind that you define the spending categories.
Personally, I have never used this method but it enables you to know how much money you have left for each thing and help you to avoid overspending on certain items. Instead, I have an excel sheet where I have allocated the money (food, travel, fun, etc.) and make sure this complies within my accounts. However, you need to update your sheet quite often to have an overview.
This makes sure that the money goes into the right places. Moreover, any amount left in at the end of the period can be transferred into the savings or be invested 😊
The 50/30/20 budget rule
Under this 50/30/20 method, you will assign 50 percent of your income for your needs and other essentials, 30 percent will be used to cover your desires such as entertainment and night outs, whereas the remaining 20 percent will be savings. This ensures that you prepare financially for the future.
Of course, you can play around with the proportions as long as you have a satisfactory percentage for the three categories. For example, I had managed to save more than 50% of my income when I reached the fourth step of my seven-step plan to financial freedom.
My plan for the next step is actually to increase the savings portion up to 70 percent of my income 😊
The savings rate of households
Let’s see the saving rate of households in different countries listed in the table since 2010 and pay attention to the data which shows that in some countries, the overall household savings rate is increasing while in other countries, it is decreasing:
Saving rate in 2010
Saving rate in 2018
You can see that there is a decrease in the saving rate in the overall Euro Area, Austria Ireland and a major decrease in the saving rate in UK households. On the other hand, households in Luxembourg have the highest saving rate, followed by households in Germany. The highest increase in the savings rate can be noticed in Sweden. So, what comes next is for you to see how you stand in comparison to these rates. Remember that these rates are calculated for the overall economy, so the savings rate on a per household base can be higher or lower.
💡 If your country is in the table above, how do you stand compared to the national household saving rate? 🙂
③ Do some research and get smart
After eliminating the unnecessary expenses try to find cheaper alternatives to the primary expenses such as:
- Cable TV and other subscriptions
- Mobile and WIFI operator
- Electricity supply
Often you can even compare prices online and choose the cheapest. Why pay more if the service or product is the same.
Make sure that you compare occasionally.
➃ Reduce or eliminate fees
Eliminate unproductive charges and fees such as the ATM withdrawal fee on your credit card.
They just take your money. Money that could help you achieve the “save money live better” – life.
You will be amazed to know how much money people spend on fees for ATM withdrawals. For instance, you can end up paying in excess of $4 or more than €3 just to make one withdrawal.
Accordingly, you should either plan your cash money better, use your card in your shopping instead of cash or switch to a bank with lower fees.
There are also often hidden fees and that is why I have e.g. chosen to use Transferwise for money transfer to avoid these.
I use Transferwise when transferring money in different currencies worldwide. You can lower the cost and get the real exchange rate.
Renegotiate the terms (e.g. interest rate). Give it a try!
I have managed to get better interest rates from my bank for my savings and the mortgage.
Nevertheless, aside from the savings, you can try to renegotiate a better deal on your credit cards, current loans as well as other services.
You can also consider switch banks if other banks offer the same services at lower fees and costs, or if other banks pay higher interest on your savings.
➅ Be patient and ready
If there are no good sales, then wait. Be patient and buy most of your items when they are on sale. In this way, you really “save money live better” because you get most out of your money.
➆ Use reward programs
Sign up for different customer reward programs if available at your local stores or the stores where you make your purchases.
Thus, you get more out of your purchases in the long run.
I hope you liked this article about “save money live better”. I will end this blog post with the most common questions in this topic 🙂
Frequently Asked Questions
How can I save money on a low income?
I recommend that you pay attention to your expenses and spending habits. Even though it is more difficult to save with low income, it is not totally impossible.
Many still need to achieve financial discipline so that the income will cover the living necessities. Moreover, paying off the debt should be among the primary goals because someone with low income may feel bigger pressure is to meet its debt obligations.
How can I save money daily?
It’s possible for everyone to save a smaller amount on regular bases even daily base as long as we are well acquainted with our budget. Hence, we can decide to eliminate some costs such as our meals, where instead of having lunch in a restaurant during our break we can prepare our meals at home.
Another way to save money on a daily basis is to define a daily budget and keep your spending for that day below the budget, of course, the remaining amount will be put in your savings.
You can also use public transportation or try walking instead of paying a taxi if you have time and the distance is acceptable. By doing so, not only you save money, but also you will positively impact your health.
Star putting your pocket change in jar money can really pile up in your piggy bank after some time. You can also download money-saving apps that can serve as a digital piggy bank. The app will round to the nearest pound after you make a purchase with your credit card. For instance, if something costs £3.55, the app will round this number to £4 and it will transfer the difference to your savings account or the account you have specified depending on the app.
How can I save money every week?
You can save money each week by packing your lunch, make coffee at home, buy in bulk and items on discount, consider using a bike, etc.
Moreover, make sure that you have analyzed in detail your weekly spending habits and you know how much money you spend on different items.
Let’s say that you buy coffee at Starbucks every morning and it costs you around €4 euro also you have your lunch in the nearby restaurant which will set you back €15. If you decide to cut back these costs, you have the ability to save €95 every week, less the cost to make your own coffee and meal. Even if you save only €50 out of the €95, it still adds up to €200 per month or more than €2,000 of additional savings per year.
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