Imagine that you could buy a car, a house, or travel more. Imagine that you could achieve every desire.
Be careful though, because the reality will catch up to you soon. Rent is steadily rising, living expenses are increasing, and you haven’t received a raise in years.
How can you make the most of your money in spite of this difficult starting point? Are you prepared to save money efficiently?
Alexander is my name. My blog is mainly focused on investing since 2016. Today, I’ll show you how to save money and achieve your goals in four simple steps.
How to save money every month in the New Year consistently
Step 1: Identify Your goals
It is difficult to achieve anything without clearly defined goals. Visualize and define your goals.
What do you want most? What dream do you want to achieve?
What comes to your mind? Write it down. Your goals will be easier to evaluate later if they are more specific. Positive moments of success can give you extra motivation to achieve your next goals.
You can think of it this way: the more specific you are with your goals, you will be able to achieve them. You will find it easier to resist temptations when you are more aware of what is important to you.
Short-term goals and long-term objectives are different. Short-term goals will motivate you to stay on track with the long-term plan. Stick to smaller goals that you can achieve faster and gain these positive experiences.
Step 2: Analyze your income and expenses
Once you’ve decided to actively work towards your dream, you need to first work out how much money you can realistically set aside and how long the saving phase will last.
Notate all your expenses and income. You must add up all the positions for all your accounts if you have more than one account.
Banks like Bank of America offer online banking. Do not overdo the details. Categorize your items as neatly as you can, but don’t go crazy with them.
There’s no need to list all the different types of apples. The more specific the categorization, the higher the cost. The effort and the benefits should be proportionate.
You should distinguish between the necessities, such as food and other nice options, like a weekly dinner at your favorite restaurant.
You can categorize income and expenditures with several current account providers. This will make it easier to manage your finances in the future.
There is also the traditional way of using Excel to transfer individual positions from your bank statement.
It’s best to use your individual online accounts, or a tool you can connect with via API.
This is particularly useful if there are multiple accounts, or you wish to include credit card statements, online broker commissions and other information within the account.
Pay special attention to your credit card statement
Paying with a Mastercard or VISA card is simple, especially if you have to wait 30 or 60 calendar days for the money to be deducted from your account.
Herein lies the danger. You’ll find yourself buying a Nintendo Switch or a stylish outfit from your favorite fashion label without even realizing.
It is important to keep your spending under control.
It is never a good idea to spend money you don’t have.
Use your debit card to pay or use cash. Prepaid credit cards also serve the same purpose, which is to assign expenses immediately.
Choose the Accounts and Financial Institutions that Best suit Your needs
You probably already have at least one bank account, and possibly more. Have you ever taken the time and effort to find out how much these accounts cost you?
Are you required to pay regular maintenance fees or are there withdrawal charges? What about interest on overdrafts?
It can be time-consuming to change your electricity provider. You will need 15 minutes. It takes a long time to change a bank account.
Why the fuss? This is a way to save money. Also, smaller amounts each month can add up to large sums over time.
What should you consider when selecting a bank?
It is important to avoid fixed costs. If you spend $10 a month on your current account over ten years, this will amount to $1200.
Even if you only pay half the amount for interest on your overdraft, you will still waste money over time.
Paying fees for withdrawals of money is not uncommon. You may even be charged fees for deposits in cash. You can avoid this.
No matter which bank you use, you will sooner or later find out about the cost-effective accounts provided by Alliant Credit Union (online only), Ally Bank and Charles Schwab Bank. These three providers can help you save a lot of cash.
Automatize your finances
Online accounts offer many advantages, including cool features that are not available at the bank counter. You can automatically classify your receipts, create monthly reports and save remittance documentation as templates.
It is much faster and more transparent than a paper statement.
If you find the trading of individual shares to be too time-consuming and are happy with a performance average of 6-8 % p.a., then there is a solution. There is a way to do it.
ETFs or Robo-Advisors are great ways to automate your finances.
Step 4: Align your life with Your goals
Spending less or earning more is the only way to get more money.
Budgeting is a great way to get started.
Stick to your plan. You don’t have to sacrifice quality of life but you need to change your approach.
Final Thoughts
Start now by controlling your finances, and saving money every month. Use one of the top investment apps. The majority of these apps are free, and will help you stick to the four-step plan.
This post will hopefully show you some helpful methods to help you make the most out of your money, and achieve your dreams.
Alexander DayTradingz wrote the above guest post. Show his blog some love. There is great content there.
