Strategies to Save Money

From LoveToKnow Save

There are many tools you can use to develop strategies to save money. The best one of all is the willingness to change your mindset so that saving money ranks at the top of the list.

Get creative with money saving solutions.

More Money Doesn’t Mean Automatic Savings

A recent survey by HSBC Bank reports that regardless of the amount of take-home pay, everyday bills and making saving a priority are two major factors that block the path of savings.

Respondents in the survey averaged an annual salary of $250,000. So, right away, the myth that earning more money makes savings easier dissolves. Experts agree that individuals at any income level can learn the benefits of wise spending on necessary items and build anticipation through economizing for others. This dual approach will generate more overall opportunities for savings in the future.

Change Your Savings Outlook

You’ll discover it’s much easier to save if you associate saving money with positive rewards. You’ll replace the quick fix of instant gratification but a payment due later with the expanded sensation of anticipation and reward for a job well done.

This isn’t a psychological trick, but rather a proven philosophy that makes every dime you sock away have a greater impact on the priority you’ve established deserves it.

So, for example, how much more will you enjoy that long-awaited family trip to the amusement park if you know that you have exactly what you need to spend already saved? No worries about buying things while you’re there, no concerns about how you’ll pay for it afterward.

Again, this change in attitude regarding spending and saving brings you closer to your financial goals.

Easy Strategies to Save Money

If you’re at a loss finding strategies to save money, simply shift a few habits and watch the money pile up.

Add Up the Small Amounts

Save an hour’s pay. If you make $10 an hour, save one hour’s pay per week. Right away, you’ve saved $40 for the month. Add more hours or days as your budget allows. Have it automatically transferred from your checking account into your savings account as soon as you get paid, so you don’t miss it.
Start a change jar. This was easy to do as a kid, and many adults and families still consider this method as a painless way to save without sacrifice.
Defer the raise. Evaluate the impact of that two-to-five percent raise in your paycheck compared to a high yield savings account.

Want to see how the little bits add up? Use this handy savings calculator.

Zero In on Debt

Ask anyone who worked hard to lose a lot of weight, and they’ll tell you that nothing tastes as good as thin feels. Now apply that same principle to spending: Nothing is worth buying if you pay more for it through credit card debt.

It doesn’t matter if you found a cheap big screen TV on sale. If you buy on credit and have to pay monthly finance charges, you end up paying more than the sticker price for that “bargain” purchase!

Avoiding debt is the easiest way to save money. You just have to set your mind to it.

If you’re already trying to eliminate debt, consider these solutions:

Manage debt more effectively. Add extra to your car payment, get rid of minor credit cards such as department stores and gas cards, and increase monthly payments on high-interest credit cards.
Get a debt consolidation loan. In many situations, a debt consolidation loan can help people pay a lot of existing debt down quickly.

Gain a better understanding of debt management and reduction with advice from a credit counselor.

Examine Your Spending Habits

With a spending plan, there’s no reason why you can’t save money and still buy some things you want.

The strategy of a spending plan is simple: Evaluate what your definite spending for the month or year will be, and plan accordingly. This ideal is different from a budget simply because of its approach toward planning to spend, rather than restricting spending.

That being said, it’s important to keep track of what and why you spend and learning to live within your means. Remember, if your desire has shifted from immediate acquisition to a long-term building of wealth, checking your spending should be easy.

Write down all purchases. Track what you spend and decide if it’s worth it.
Use coupons. Financial experts state that using coupons is like getting free money for things you’d buy anyway.
Ask yourself “why.” Do you shop when stressed? Out with friends? Because you feel you deserve it? If you have that type of emotional attachment to money, gain a better understanding of what really needs to be satisfied.

Never thought about the impact of emotional spending? Read this MSN Money article.

Build Up to Greater Savings

Money experts agree: Once you’ve established minor saving habits and better spending skills, you’re ready to advance to stronger strategies to save money.

Financial advisor Jesse Brown suggests the following steps for paying yourself first.

Adjust your accounting methods. Round up every checking account entry to the nearest dollar, “pad” your accounts with money that you don’t record.
Establish an emergency fund. Save at least three-to-six months salary in a high-yield savings account, like the one offered by Emigrant Direct. You’ll earn up to four percent more interest over a brick-and-mortar savings account.
Consult a certified financial planner. There’s a difference between saving and investing. Make sure your primary savings needs are met before thinking long-term. A financial planner will help you design money solutions that go beyond pinching pennies and help you build wealth.