Save Money with These Simple Tips

Post by Carly on September 12, 2014 · Under Hints and Tips · Comments Off on Save Money with These Simple Tips 

For many Australians, saving money can sometimes be an uphill task considering the high number of both direct and indirect expenses that we have to incur in today’s highly capitalist world. However, if you wish to start saving, the following tips should help you spend smartly and consequently save more:

Make a deposit to your savings account first

The best way to save money is to make sure that the portion you intend to save is not directly accessible once saved. One way of achieving this is by sending the money to your fixed or retirement account. As a result, you save the money first, then proceed to use the rest in whichever way you deem fit. The best way is to start small and increase the deposit-size as time goes by till you reach a figure that you can comfortably save on a regular basis.

Avoid debts

Some types of debts are usually generally unavoidable, for example, getting a mortgage so as to acquire a new house. To limit the amount of debt you incur through these types of loans, try and make a big down payment first so that you have less money to pay back. Also ensure that the amount of debt payments is at most only up to ten percent of your net income as more than this can limit your spending potential and consequently cause you to take up another loan just to keep your head above the water.

Establish a time frame

Setting time-limits to your goals will help you gauge if you are on the right path. For example, if you set a goal to own a house in 2 years, you should set six month goals to save a certain amount of money and then strive to meet these first. They should also be realistic and the amount of money you target be based on the current forecasts of the cost of housing in the two years. You can easily get a proximate figure by checking out the going rate for houses in the area you intend to acquire one and adjust your savings accordingly.

Have a budget

Having a budget is an important aspect of saving as it enables you to stay within the set spending limits. That said, the budget should be preferably made at the beginning of the month, so that the expenditure and savings are calculated and the money to be saved, set aside. It should also include a small sum for unforeseen expenses and emergencies.

Be cautious when making investments

Saving responsibly also goes hand in hand with investing wisely. Investing in stock markets for example, can be a good investment in the long term, but a very risky one in the short term. This is because today’s markets can at times be highly volatile, with the bad months sometimes taking the markets years to recover leading to huge losses. As such in-depth research is required before investing in such sectors of the economy so that your savings are not adversely affected.

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