Growing your wealth requires you to learn the art of money-saving. You must devise both short- and long-term strategies to help you save that coin. The good news is that most of the money-saving strategies are straightforward.
We have compiled several ideas to help you save money and grow your wealth.
1. Set aside a portion of your earnings before paying your bills.
The first step towards a successful money saving culture is by setting a goal. Figure out how much you need. Then automate your savings. Work with a bank that takes the work out of saving through automation. Here is how you can break down your saving goals.
Short-term money-saving goals
Short-term goals can include the following:
- Setting up an emergency fund.
- down payment for a car.
Long-term money-saving goals
Long-term goals take more years to achieve and may include the following:
- Down payment for a house
- Children education
When saving for a child’s education, consider saving the money in an investment account or an education insurance policy.
When starting your saving journey, start with small, achievable goals. The joy of achieving such goals will make you want to do it often.
2. Create a budget and keep track of your expenses.
Record your expenses and keep track of all of them. Organize your expenses into the following categories as shown below, and ensure you cater to all the expenses.
Look for a free-spending tracker and get started. Sign up below for a free-spending tracker to help you get started.
Source: Mep Team
3. Look for ways to reduce spending.
You need to find ways to cut back on spending and look for ways to save on fixed expenses.
Cancel that subscription and membership you don’t use.
Let’s agree that all work and no play will make you a bore. However, look out for subscriptions that offer the kind of entertainment you love at a fair price. Cancel the subscriptions that don’t add value.
Plan and budget for when you eat out.
Eating out is expensive, and you must plan and budget for it. While spontaneity is good, it will cost you more. Plan and keep the money aside that you will need for the outing.
Pack your lunch and save the money.
Buying lunch from the vendor in your office may cost you anything from $3 to $20. Save money by bringing your lunch from home. You must be wondering, what if I’m single and I have no desire to cook every day?
Well, organize for your chef to prepare every week’s food and put it in containers. Pack one each day and take it to work.
Look for shopping deals .
It seems like a lot of work to keep looking for shopping deals, but you will be able to save a coin here and there. Look for shopping deals in supermarkets and wholesale shops.
Instead of buying groceries every day, visit the market and buy them wholesale. Things like tomatoes, fruits, carrots, and other groceries cost less when you buy them in the main market.
Save on utility bills.
Find innovative ways to save on electricity and water bills. For instance, installing a tankless water heater will reduce your electricity bills by a whopping 30%. Here are more tips to save on your electricity bills.
- Use more efficient light bulbs.
- Replace old appliances with energy-efficient ones.
- Use appliances wisely.
- Ensure yearly maintenance of your HVAC.
4. Choose the right savings accounts.
To actualize your savings goals, you need to find the right savings account. Some of the features of a good savings account have the following features:
- It limits the number of withdrawals you can make.
- It earns you interest. If you have a long-term savings goal, consider accounts with a higher yield rate.
- It gives introductory bonuses and offers.
- It is a low-risk account.
- Check the account charges. Some savings accounts will charge fees for low account balances, monthly maintenance fees, dormant and inactivity fees, ATM fees, etc.
- Separate your savings accounts based on the goal.
5. Make use of the appropriate budgeting tool.
The right budgeting tool will make it easy for you to catch all the expenses and categorize them appropriately. Here are the features of a good budgeting app.
- Integrates with your financial apps, making it easy to import data.
- It creates reports and tracks expenses.
- Web and mobile access.
- It categorizes your expenses.
- Income is correctly allocated to the various categories.
6. Consider a staycation.
A staycation is opting to tour your own country or town instead of visiting another country like Dubai or Switzerland. If you are working on saving money, look for travel deals within your country. Not only will you get to save money on this, but you also get to explore your country.
7. Make an effort to reduce your debt load.
Monthly debt repayment is one of the biggest hindrances to saving. Debts take a big chunk of your income. Work on reducing your debt load by using methods such as the snowball method.
With the snowball method, you start by knocking off small debts. Once cleared, you roll the cash you were using to pay the small debt over to the next small debt until you clear the debts.
8. File your claim for relief
The income tax cap allows a person with an insurance policy and pays for NHIF to claim tax relief. You can claim 15% (insurance premiums + NHIF contribution). The amount of relief claimed should not exceed 5,000 per month or Ksh 6,000 per year.
Save the relief claimed each month in your saving account. By the end of the year, you should have amassed a sizable sum.
9. Calculate your annual spending
Do you spend small amounts of money on things like snacks at the vending machine? For instance, if you spend $3 (Ksh 330) every day, at the end of the year you will have spent $1,000 (Ksh 118,000). Annualizing your spending gives you a bigger picture and allows you to see which expenses you should cut back on.
10. Other money-saving ideas
- It never hurts to ask for discounts and coupons.
- Cancel automatic subscriptions and memberships. Renewing a subscription every month gives you a chance to shop around for discounts and offers.
- Put the pocket change into your savings. They will go a long way.
- Research prices and offers before you shop for groceries.
- Make major purchases when there is a sale.
Creating a budget and following it through is one of the smartest money skills. It makes it easy to prioritize important financial goals over less important ones. Saving over time makes it easier to achieve long-term financial goals.
As you work towards achieving your saving goals, look for the best savings account where your money can earn high-yield interest. If you are looking for a simple application to help you start your budgeting journey, sign up. Our free template is easy to use, even for a novice.