Zero-Based Budget Tips: Most people want to save money. But despite the best intentions, only some succeed. Those who cannot save money, usually are unaware of the best ways of starting.
They don’t understand that saving money is a habit one must work on and develop.
A Zero-Based Budget: The Secret To Developing The Money Saving Habit The Money Saving Habit
by guest writer Marina Thomas
To begin the process of saving money, people usually set milestones. Milestones such as setting an age when to start saving, when the kids move out or when someone gets a raise.
While it is good to set such goals, achieving it remains doubtful unless you can develop money-saving habits now.
Emphasizing your future needs over your current wants is key.
Is It Difficult To Save Money?
Money saving is not at all difficult if you make some changes in managing finance that is easy to implement by tweaking your spending priorities.
Although most people realize that it is vital to save money but still few can do it.
According to a report published by the Federal Reserve, it is challenging for about 40% of Americans to cover an emergency as small as just $400.
The reason for the inability to save money is because they:
- Have other goals that are more important to them.
- The lure of instant gratification turns them into compulsive buyers for products that are far from necessary, and it not only increases spending but also drives them towards debts.
- The urge to focus on wants over needs is at the root of the problem that forces people to live on paycheck to paycheck.
In this article, we will discuss some of the easiest ways to implement a few chosen money-saving plans.
These aim to get you in the habit of saving, so that soon you’ll be saving money without even noticing it.
Saving begins with a zero-based budget
What is a zero-based budget? A zero-based budget means that your inflows of money or earnings and outflow or spending are equal.
Before you save or spend money, assign a name to every dollar so that it relates to the job that it must perform.
Create categories or the heads under which you spend or save money.
Food, clothing, shelter and utilities and transportation are the major heads of the budget, and you must include saving as another important category.
Having set aside funds for the prime heads that constitute your basic needs and savings you should now create heads for the leftover money.
Since you have earmarked every dollar, by sticking to it, you are sure to achieve saving.
Stop carrying debts
Follow the philosophy of living life within your means because it helps to avoid overspending which leads to borrowing and debts. Saving money becomes difficult if you must make debt payments every month.
Clear away debts as fast as you can by adopting the debt snowball method that entails paying off the small debts first and then aiming to knock off the bigger ones.
Only when you stop allocating money for debt payments that the prospects of saving look very bright.
Streamline subscriptions and memberships
Scrutinize the subscriptions and memberships that you have because the chances are high that you are paying for multiple subscriptions whether it is a gym membership, Netflix or Spotify subscriptions or magazine subscription.
Identify subscription accounts that you might be using rarely and cancel it.
You can renew it if you need for it later but be careful to fit it into the budget.
Avoid overspending on groceries
It is normal that households overspend on groceries without ever realizing it. It happens because people seldom have a look at the pantry inventory before ordering groceries and hardly do any planning for meals.
It results in food wastage as well as buying much more groceries than what you need.
Plug the gaps that should help to cut down groceries and generate surplus cash that you can save.
Try to cut out snacks and junk food that can weigh down on the budget heavily.
Related: Good Money Tips To Save More
Apply your mind on spending money earned from unexpected or extra income
Sometimes you might get some money that you had not expected like a tax refund, inheritance or work incentives.
The problem is that you might be lured to spend the money without proper planning, or you might like to stash it, but neither helps.
Keeping in mind that the happiest person is one who does not carry debts, use the money to pay off any debts that are carrying because once you are debt free, you can build an emergency fund with the extra money.
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Decrease energy costs
Energy costs can burn holes in your pocket if you are not mindful about how you are using it. Monitoring energy consumption should be the top priority if you want to generate funds for saving.
Adapt some measures in conserving energy like improving the home insulation.
Using dimmer switches with LED lights, washing clothes in cold water and even fixing leaky pipes can save energy and costs.
Use energy efficient appliances and even if the initial cost is high, it pays back much more in the long run.
Look for discounts
Life is all about negotiations and looking for opportunities of saving money.
Be assertive when buying anything and ask for discounts because money saved is money earned.
No matter whether you are buying tickets for some musical or sports event or movies ask if some discount is on offer.
Never buy anything without bargaining or at least probing if some discount is available.
Make it a habit of saving money so that you get so much used to it that you will never have to give it a thought. It is all in mind and if you have the will to save money finding a way is not at all difficult.
Your commitment to saving money determines how much you can save.
Automate the process of transferring money from your checking account to savings account every month every month or do something similar to keep up with the habit.
Marina Thomas is a marketing and communication expert, helping clients in long-term wealth plans. She also serves as a content developer with many years of experience. She has previously covered an extensive range of topics in her posts, including money saving, Budgeting, business debt consolidation, business and start-ups.
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