In a very consumer world, it’s understandable that there are people struggling with saving money and achieving their financial goals. If one of your goals is to save money and you have no idea how to do it, today we are going to tell you some tips that you should apply to achieve it. So let’s quit procrastinating, and start taking action to achieve those goals.

We are going to discuss the importance of saving money, and guide you through recognizing needs and wants..

Importance to save money

It is always important to know what your reasons for wanting to save money are. Some of the most common reasons are as follows:

Steps to save money

The first thing that you should know if you have a financial dream or goal that you want to achieve is that you will need to sacrifice most of your expenses, primarily the ones that aren’t necessary or essential.

  1.  To start, we are going to need you to crunch the numbers and write down where your money is going. Make sure that you write down all of your expenses, as this is a very important step.

Needs 

  1. Then, you need to make a list of your needs, but what are needs? Well, an example of a “needs list” could be:

You should write on your needs list only the things that are a necessity.

  1. So after you have your needs written down, the next step is to calculate how much money you have coming in per month.

We need you to write down your monthly salary and see how much of your salary is going towards your needs. 

Let’s suppose your monthly payment is $1,000 and you need $500 to pay your needs…

That means that 50% of your monthly income is going towards your needs. This leaves you with 50% leftover.

Saves

Now, this is the part where a lot of people come to struggle, and that would be the savings.

This is the time to muster up your mental fortitude and start placing your future goals ahead of your present desires.

  1. Now that we know what our needs are, it’s time to start seeing which of our leftover expenses can be cut. For example, if you are spending around $20 every week going to the movie theater, this is an expense that you should cut.

You must be very honest with yourself and reduce your spending to the point where you can only afford to buy necessities..

After doing the math, we know we have $500 free,” and we need to use 80% of it for savings. So that means you are going to save $400 monthly. If you want to save even more money, you can use 90%. It depends on how much you want to save, but we do not recommend saving less than 80%.

Wants 

  1. And the 20% left we are going to use it for wants, wants could be:

 All of the things that aren’t on your list of needs are the things on your wants list.  

Sometimes, if you wish to go further, you might not use the full 20% and put the extra money into savings.

Advice to save money

We now understand the procedures to do in order to save money. But what are those suggestions that you might use to cut costs?

  1. If you are the type of person who always wants to purchase something at the mall, such as a t-shirt, makeup, video games, etc. We advise you to attempt to avoid visiting the types of venues that could result in you spending more money.
  1. You ought to carefully evaluate whether what you want to buy is more important than the objective you have if you find yourself in a situation where you want to buy something that is not on your list of needs and costs more than 20% of your monthly budget.
  1. Always keep just enough money on hand to cover your necessities, plus a little extra for emergencies.
  1. The main thing is for you to recognize that what you are doing has a purpose that is meaningful to you personally. Most of the folks sitting next to you won’t likely understand you and may begin to believe you are insane.
  1. Always bring a list of exactly what is needed at home before you head to the market to get your food to avoid acquiring more than you need.
  1. Always try to make your own food at home because eating out is generally more expensive. Additionally, try to eat anything before heading out so that you may not be tempted to buy food that you don’t require.

It is important to

Remember, in order to attain your goals, you may occasionally need to make some sacrifices. However, after you have succeeded in saving the money you desire, you will feel ecstatic and immensely proud of yourself. That principle may be applied to all of your goals in life, not just your financial ones.

Do those wants and needs lists and keep in mind to be completely forthcoming with yourself.

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