With these uncertain times, saving money is more important than ever. If you’re having trouble cutting back your spending so you can increase savings, here are some ideas to plug those spending leaks!
- Don’t fall for the sales – Sales, clearances, and coupons can be great ways to save money, but they can also be potential spending leaks if you purchase non-necessities that you weren’t planning on buying otherwise. Ask yourself this; “am I buying this just because it’s on sale?” If the answer is yes, chances are you shouldn’t be purchasing it!
- Don’t develop “payday syndrome” – Do you spend more money on paydays? Here’s a possible approach: after receiving a paycheck, don’t buy any non-necessities for at least 24 hours; this gives you a full day to reflect on what bills need to be paid off, how much of the paycheck needs to go to savings, and helps to rein in overspending!
- Don’t forget about those little expenses – Those little expenses can add up quickly. For instance, spending just $5.00 every day (whether it’s getting a fast food combo meal, getting expensive coffee, or smoking a pack of cigarettes) will cost you close to $2000 per year! Finding cheaper alternatives, or cutting those habits in half or out entirely will go a long way towards cutting back on spending!
- Avoid the minimum payment trap – Pay off as much of your credit card as you can to avoid accumulating interest, and pay in full and on time if able! On an 18% APR credit card, if you only paid off the minimum 2% of the balance each month on a $5,000 credit card debt, never purchased anything on the credit card again, it would take you 38 years and $17,674 ($12,674 in interest payments) to pay the debt off! Paying in full and on time will not only save you from owing any interest at all, but it is also the best way to improve your credit score! (For more ideas on improving credit scores, check out our previous post here!)
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