How to End Each Month with Money in the Bank
Do tumbleweeds start blowing through your bank account at the end of every month? These six tips will help you save your dollars and stop the panic from setting in at the end of each month.
1. Create a budget
Record your expenses over the course of a typical month. Once you have a clear idea of your spending habits, you can start to organize your incomings and outgoings more effectively.
It may seem a little time-consuming and complicated but recording your spending and creating a budget is essential if you want to avoid end-of-month stress about finances. Seeing your expenses in black and white will help you identify your priorities and develop a realistic spending plan.
2. Save automatically
An easy and effective way to save is to set up an automatic saving scheme with your bank. Each month, a fixed amount will be deducted from your checking account and moved to a savings account. Some banks will ask for your permission to deduct a set amount from your wages and transfer this directly to a savings account. After it’s all set up, you won’t need to do a thing to save each month.
3. Establish a goal
What are you saving for? Set a clear purpose for your savings and you will have money left over at the end of each month. Also, having a clear idea of what you are saving for will help you determine how much you need to save and the timeframe to achieve your savings goals.
It is always a good idea to establish a short-term savings goal. A short-term goal is more achievable and thus you will find it easier to stay motivated and keep putting money away.
4. Use public transport
A lot of people spend huge sums on cabs to get around, but is taking a cab really a priority? You can get where you are going using public transport! Focus on your priorities and your savings targets and start taking buses and trains. Buy a Metro card! The difference this simple change will make to your back pocket will be huge and it’s also better for the environment.
5. The 30-Day Rule
Impulse spending can really hamper your efforts to save. If you see something you want to buy but that is not a necessity, don’t buy it straight away. Instead, think about it for a while. If, after 30 days, you are still thinking about it and still want to buy it, then do so. More often than not, however, you will have realized that you can live without it.
Use the 30-day rule for all non-essential purchases. Every time you decide not to make a purchase, you are saving money.
6. Cut out the extras
Typically, we spend most of our money on grocery bills, utility bills, internet and phone bills, memberships to streaming services and perhaps some clothes, drinks and nights out.
Instead of saving automatically (see tip 2), people can very easily spend automatically, spending money on things without reflection. However, by thinking about what you need, you can start to save. Do you need a subscription to two streaming services? Do you need another t-shirt? Could you invite your friends round for a home-cooked meal rather than going out? Cut out the extras and you will quickly start to save.