Especially in circumstances like these, many of us find ourselves in a situation where saving money becomes a priority. Perhaps our job has undergone downsizing, or maybe we’ve decided to tackle our debt burden head-on. Regardless of the reason, here are three straightforward tips on how to save money each month while still enjoying the process.
These three simple steps involve: Assessing your current financial situation, Reducing recurring payments, and Using a cashback credit card for remaining expenses. Let’s put these practical money-saving tips into action. First, gain a comprehensive understanding of where your money is going. There are only three ways you typically spend money:
Credit card payments, online payments, checks written, and debit card spending from your bank account. Exclude online payments to credit cards from this category.
Cash withdrawals:
Review your bank statements from the previous month, with particular attention to cash withdrawals. Categorize all expenditures into categories like rent, groceries, entertainment, transportation, and start by addressing the most significant expenses. Second, decrease or eliminate recurring payments.
In the previous step, you’ll notice that recurring monthly payments are the most manageable.
Mobile Phone: If you’re paying more than $15/month, switch to a prepaid mobile phone plan. You can save as much as $50/month or $600/year with hardly any loss in functionality. Still using a landline? Replace it with Skype, an internet phone service, and save between $30-$60/month.
Insurance: Do you think you’re paying too much for car and health insurance? Reconsider. I recommend increasing the deductibles on your insurance policies. Start by creating a health savings account that covers the deductible and a car savings account that covers the deductible and contributes to your next vehicle purchase. Third, treat yourself.
Allocate some of the money you’ve saved and reward yourself with an occasional getaway or indulge in an activity you enjoy, like going to the movies or dining at a nice restaurant. This way, you can genuinely savor the fact that you’re learning how to save money each month.
You don’t have to immediately spend all the money you save each month. However, consider the rewards as a way to balance your budget effectively.
Last but not least, ensure that you make all payments using a cashback credit card. Once you’ve trimmed your monthly expenses, make sure to maximize cashback rewards on your remaining bills. By using one of the top cashback credit cards for your monthly payments, you can earn as much as 1%-2% cashback on all your bills, and up to 5% off on groceries and gas.
