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Start Saving Money in Four Simple Steps

Posted on 08. Apr, 2015 by in Financial Planning

Start Saving Money in Four Simple Steps | XLFinancial BlogPutting away more money is a goal that most people share. Still, turning that desire into actual money in the bank can be a challenge, no matter how serious you are about saving. Fortunately, the following simple measures can make saving money easy for virtually anyone.

1. Start Tracking Spending

Making an effective budget and then sticking to it is the key to saving more money. You can start by tracking all of your spending for one month to identify necessary expenses and areas where you might be wasting money. Then, you can start budgeting money to cover essential costs while working on eliminating luxury expenses and impulse buys.

2. Set Savings Goals

You will save more effectively if you are invested in a final goal, so take time to figure out what you are working toward. Whether you are saving up for a trip or your eventual retirement, setting a specific goal and identifying how long it will take to achieve will help you stay on track.

3. Cut Expenses

If eliminating extra expenses still leaves you little room to save, look for ways to reduce the cost of unavoidable expenses, such as food, transportation, utilities, healthcare and insurance. Consider making the following changes:

  • Use coupons and store brands.
  • Take advantage of discount or membership programs.
  • Opt for preventative medical and dental care when possible.
  • Bundle expenses such as insurance policies.
  • Focus on efficiency when driving and managing home energy use.

These small efforts can generate significant savings, especially in the long run.

4. Make Saving Habitual

Take whatever steps you can to make saving a regular habit. Consider setting up automatic monthly transfers into your savings account. If you frequently use cash, start collecting and saving spare change. Finally, try limiting credit card usage so that you have a better idea of how much you are actually spending and saving each month.

Watch Your Savings Build

Once you implement these basic steps, you should start seeing your savings accumulate. Make sure to keep monitoring your progress and adjusting your goals as necessary. This will help you keep on track and save even more over the long run.

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