There are effective ways to save money. But first you’ll need to believe that saving money is important in your life.
Start a budget
A budget helps you determine how much savings you need for emergencies, money to achieve short/mid/long term financial goals, and to afford wants and luxury goods. It’s important to save for things you want to purchase versus placing them on credit.
Now that you’ve determined your savings amounts, set automatic transfers each pay period to these savings accounts. Automatic transfers help you reach savings goals faster. The sooner you send money to savings accounts the less likely it’s spent.
Note: In some cases, people’s habits to spend is strong and having easy access to a savings account, where you also have your checking account, can be too tempting and lead to spending the savings prematurely. Consider opening a separate savings account at another financial institution and setting up multiple direct deposits. Contact your HR department to set up your payroll direct deposits.
If you do save at a different and less accessible financial institution, make sure you periodically check the balances.
Increase Your Income
Majority of our pay comes from working at a job but that doesn’t mean you can’t earn more by asking for a raise or seeking a higher paying position. It can also be beneficial to take on side jobs or small gigs to supplement your income. Consider improving your skills to increase your professional value and command a higher income.
Be very specific on where your money is going. Reduce the amount of money you spend spend so you can allocate those funds into your savings account. If you’re living paycheck-to-paycheck, consider lowering your expenses. Cut down discretionary expenses and find lower cost alternatives to existing contracts (cell phones, cable, utilities, etc).