Whether you’re the owner of an up-and-coming startup, just got your first job out of college, or are still learning the ropes of financial independence after moving away from mom and dad, it’s important to follow smart spending and saving guidelines in your life.
Many people may feel that they can make it just by watching their spending and dropping a bit of cash into savings every now and then. While this might work in some cases, having firm rules to follow can help you stick to your financial goals.
Try out these four financial tips for smart spending and saving to see if they can help you elevate your finances!
Make a budget
Budgeting may seem obvious, but you’d be surprised how few people take the initiative and plan out their expenditures. Because spending too much each month (even if it’s only a little) may quickly add up and produce serious financial issues, having an appropriate monthly budget can make a big difference in your long-term financial health.
New to budgeting? Try the classic 50/30/20 budget. Here’s how it works:
- 50%: put about half your income toward necessities, like rent and medical bills.
- 30%: put 30% of your earnings toward wants, like getting drinks with friends.
- 20%: put the last fifth of your income toward savings and debt repayment.
Looking for a challenge? Try swapping the 20% and 30% above to turbo-charge your savings!
Start saving now
Speaking of savings, it’s never too early to get serious about savings—and yes, that includes retirement savings. No matter where you are in your career, it’s a good idea to start stashing away cash for a rainy day, to plan for a big expense (think a wedding or a new car), and ultimately for retirement.
Here’s the thing about saving: the longer you do it, the more you get out of it, thanks to the power of compound interest. If you’re not sure where to start on your savings plans, it’s never a waste to work with professionals like those at Cetera retirement solutions.
Name your goals
Attaching time horizons to your goals is also a smart idea. For example, you might wish to backpack through Asia in the next year or get engaged in the next five years. To achieve any of those objectives, you’ll need to properly manage your spending and save intelligently. Additionally, having goals in mind can make it easier to remember why you’re being careful with your savings in the first place.
It may also be wise to consider investing your spare cash, depending on your objectives. These days, beginners may invest in a variety of methods, including robo-advisors and user-friendly app-based trading platforms like Robinhood. Investing, whether in your favorite company or in financial instruments like mutual funds, may help you grow your money.
Increase your revenue
One tip that too few savings experts point out is that it’s easier to save more money if you’re making more money. So, part of any good savings plan includes finding ways to increase the total amount of money that you have to work with each month.
Whether that’s using the job searching tool on Indeed or simply negotiating for a raise with your current boss, having increased cash flow is a surefire way to make your savings and spending goals much more attainable.
Ultimately, different tricks and tips work for different people. What’s important is that you make a plan and stick to it, holding yourself accountable whenever your savings or spending goals fall below where you’d like them. In time, you’ll start living your best life with wise finances.