How to save money?

_{By Bromwich+Smith Staff | 760 words | Reading Time: 3 minutes and 48 seconds | Date: 2022/10/11}

We all know that we are supposed to save money, but for some of us its not quite that easy. Once you know how much extra income you have every month after your expenses and financial obligations are accounted for how should you allocate the remainder into savings?

1. Add Savings to your budget.

By adding a line item of “savings” to your monthly budget, you will be less likely to spend those funds otherwise. By budgeting a set amount, it becomes automatic to distribute into a savings account. You can also set up to have a set amount, or percent of your paycheque directed automatically into a savings account, making it easier to allocate without the temptation of spending it.

2. Set a goal.

By predetermining what your financial priority is, you will be able save towards that specific goal. Once you have reached that goal, you can reallocate those funds towards another goal. An example of this would be knowing you wanted to have $5,000 in an emergency fund, pay off $10,000 in credit card bills and save for retirement. Determine how much money you can put towards these each month and in this example, we will estimate $1,000. By putting $500 a month towards the credit card debt, $400 a month towards your savings and $100 towards retirement you will see each account grow. Once you have reached $5,000 in your emergency account you can reallocate that $400 towards your debt or retirement account. No two families will have the same goal, or the same amount of disposable income each month.

3. Evaluate Expenses

The return to the office for many meant additional expenses. Paying for parking, maybe new clothes for a post covid body, morning coffee run and buying lunch adds up quickly. Are there any costs you could eliminate from your daily spending? Consider putting yourself on a takeout budget, meal prep at home and limit the amount you are spending on lunches each week. Do you find yourself picking up new habits, like daily smoke breaks, or weekly drinks after work? The answer might be that you do not want to cut out these new expenses, so rather look towards other areas in your budget that you can take from to counterbalance these new costs.

Click to Book A Free Consultation

4. Evaluate household services and bills

One of the easiest ways to avoid extra costs is to not pay bills with a credit card. If you do not have the funds to pay off your credit card, the interest will continue to add up over time. Look at your insurance policies, is there anything that should be changed? Maybe you no longer drive your second vehicle, or recently replaced your roof. Big changes to your house may reduce the liability and decrease your payments. Look over household services, including streaming services or lawncare that you may not need.

5. Adding Income

Adding income can be as simple as going through the items you are no longer needing. Selling clothing or toys the kids have outgrown, and putting the money into a savings account is an easy way to start small. As you go room by room, you may find larger items that aren’t being used and could clear up space and add to your savings account. The treadmill, or ergonomic desk set up that’s a shelf for folded laundry, or the make your own beer kit you thought would be a great new hobby are all items that others will see as a treasure. You may have downsized your house, but are still storing the lawncare items you once needed.

You may find that you have a passion for a new found hobby, try marketing on social media. Others may love to purchase your hand knitted items, or home made bath bombs for stocking stuffers or holiday gifts. By having a plan for any additional income, be it to pay off debt or go into savings will help you ensure you don’t spend the extra cash instead.

Remember that as life situations change, so do your financial plans. Sometimes the best intentions end up sidelined while we tend to pressing or unexpected situations. By creating a plan, you allow yourself to be flexible when you need to but help set yourself up for a bright future.

Click to Book A Free Consultation

No matter what your financial story is, Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. We want to see you flourish!