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, itâ€™s a good idea to do a little bit of both.
No matter how much you spend, itâ€™s possible to spend it all on things that you donâ€™t needâ€”things that give you less pleasure than they cost. So economizing is necessary when youâ€™re looking to save up money. And itâ€™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 weâ€™re walking around on the streets, tempting displays catch our eyes. When weâ€™re at work, we canâ€™t help looking online for things to buy. When we go to stores, we end up buying things that we didnâ€™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
Youâ€™d be surprised at how many people donâ€™t exactly know how much money they have to spend. Here are a few questions you need to ask yourself:
- Whatâ€™s your monthly paycheck?
- How much goes towards taxes?
- How much do you need to set aside to achieve long-term goals?
- Whatâ€™s left?
- Is that amount enough to cover all your expenses, including rent, utilities, transportation, food, and entertainment?
If youâ€™re really making a lot less than needed to live on, you can reduce the amount youâ€™re putting aside for long-term goals because thereâ€™s no point in killing yourself in order to fulfill your dream. This will only make you feel resentful and wonâ€™t help you in the long run. Instead, itâ€™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, youâ€™re likely to save up to $500 every month and you can put it towards long-term goals. Thatâ€™s how much you can benefit from just keeping track of how much youâ€™re making and how much youâ€™re spending every month.