Estimated Monthly Savings: $500
There are generally two ways to save money. One is to make more money than you need and the other is to economize. In general, it’s a good idea to do a little bit of both.
No matter how much you spend, it’s possible to spend it all on things that you don’t need—things that give you less pleasure than they cost. So economizing is necessary when you’re looking to save up money. And it’s a good idea to keep your budget in mind as a general rule.
Temptations Are Everywhere
Economizing is easier said than done because we are faced with enticing things to buy all the time. When we’re walking around on the streets, tempting displays catch our eyes. When we’re at work, we can’t help looking online for things to buy. When we go to stores, we end up buying things that we didn’t go there to buy.
So what is a person supposed to do in this atmosphere of shopaholism? How do you economize and save up enough money to achieve long-term goals like buying a house or starting a small business:
Know Your Budget
You’d be surprised at how many people don’t exactly know how much money they have to spend. Here are a few questions you need to ask yourself:
- What’s your monthly paycheck?
- How much goes towards taxes?
- How much do you need to set aside to achieve long-term goals?
- What’s left?
- Is that amount enough to cover all your expenses, including rent, utilities, transportation, food, and entertainment?
If you’re really making a lot less than needed to live on, you can reduce the amount you’re putting aside for long-term goals because there’s no point in killing yourself in order to fulfill your dream. This will only make you feel resentful and won’t help you in the long run. Instead, it’s better to have a decent standard of living and take a little longer to save up money.
However, if you keep your budget in mind, you’re likely to save up to $500 every month and you can put it towards long-term goals. That’s how much you can benefit from just keeping track of how much you’re making and how much you’re spending every month.