You may have heard it said that managing money is 20 percent head knowledge and 80 percent behavior. You might know all of the right things to do, but you might also have a hard time finding the discipline to put these behaviors into action. But saving money really is possible if you commit to practicing the following four steps:
Step 1: Make a Plan
Having a budget is one of the most important steps when it comes to managing your money. You need to know all of your income and all of your expenses, and then you need to plan accordingly. Look at your monthly bank statements and see where your money is going every month. Budget every single dollar of income into a category, such as household expenses, car expenses, loan accounts, utility bills, grocery money, fun money, etc.
Step 2: Start Cutting
After you’ve looked at all of your expenses and analyzed your bank statement, you might have noticed areas where you are overspending or where you can cut back. Do you really need a landline telephone and a cell phone? Do you really need to make the daily stop at the high end coffee shop when you can get free coffee in the break room at work? Maybe you didn’t realize how all of the little things can add up quickly and suck away your income. If you can cut even a few unnecessary expenses each month, you can start adding that money to your savings account. Cutting means sacrifice, and this can be hard. However, if you are committed to saving money, the short term sacrifices will reap long term benefits.
Step 3: Find New Sources of Income
If you want to save more money, sometimes you just need to find a way to make more money, and there are no shortages of ways to earn a little bit of extra income. Maybe you have a lot of free time and can take on a side job. You can accomplish two things at once by decluttering your home and selling household items on eBay or Craig’s List. Remember that treadmill sitting in the basement getting no use at all? Sell it! Maybe you just want to hold a good old-fashioned garage sale or even list things on an online garage sale site. Again, it takes time to earn extra income, but it will be worth it when you have a little extra money sitting in the bank.
Step 4: Be Committed
Saving money really is more about behavior that it is about knowledge. In order to save money, you have to be willing to make sacrifices and tell yourself no. Sometimes it means going without something you want but don’t really need. It might even mean eating beans and rice instead of steak and vegetables.
Having a plan, cutting expenses, finding new income sources and being committed are four steps that can help get you on the path to saving money and making wise financial choices. In addition, enlisting the help of a professional debt management company like Creditguard.org can lower your interest rates, lower your monthly payments and even reduce your time spent in debt.