How to stretch your money
January 13, 2016
Do you have a hard time controlling your expenses? Need help saving money to achieve your goals?
Here are a few tips on how to control your finances and really 'stretch' your money:
1. Make a spending list
To do this, keep your receipts or write down the cost every time you spend money on something and then add it all up - you can use Excel or an app to do this.
That way you can see how much money you've been spending and on what and be aware of where you should cut your expenses.
2. Set your budget
First, write down the amount of all your bills and other fixed costs (like your groceries) because these are the things you always need to have money for and pay first.
Decide on a certain amount of money or a percentage of your income to put into your savings accounts right after you get your paycheck.
Now, if you subtract your fixed costs and the money that you choose to put into savings from your earnings, you will determine how much spending money you have left, which will help you plan your expenses better.
Refer back to your spending list and consider what you usually spend your money on and which of those things are your priorities.
You can plan how much money you want to let yourself spend on each of those things - e.g. if you have 300$ left over, you might allocate 100$ to eating out, another 100$ to shop and another 100$ for weekend plans.
If you keep logging your expenses (or at least saving your receipts), you will be able to see if you're overspending on any of those areas.
3. Get a savings account
It's very important to get a savings account and try to put some money aside every month.You never know what's going to happen tomorrow and all of a sudden you might need some money.
You don't want to find yourself in that situation and not have an emergency fund!
Usually, it's best if you can have an emergency fund that equals between 6 to 12 months of your monthly salary.
You can also have different savings deposits for each objective you have: e.g. one savings account for emergencies and another one for a vacation you're planning.
You can also have different savings deposits for each objective you have: e.g. one savings account for emergencies and another one for a vacation you're planning.
That way, you can actually visualize how much you're saving and what it's going towards.
Watching your money pile up is very satisfying!
4. Take advantage of sales and promotions
Don't be tricked into buying loads of things on sale just because they're cheap.
Whenever we buy on impulse we usually end up getting things that we didn't need and probably won't use that much.
However, if you know you need to buy something, use sales to your advantage and plan those expenses for sales periods.
However, if you know you need to buy something, use sales to your advantage and plan those expenses for sales periods.
This will help you save money to put aside at the end of the month.
5. Save gas money
If you drive a car, search for the cheapest gas stations in your area or think about giving somebody a ride and splitting the costs.
If you have a good public transportation system in your area, you might want to think about reducing your car trips if it's cheaper at the end of the month - do the math to compare both possibilities!
If you have a good public transportation system in your area, you might want to think about reducing your car trips if it's cheaper at the end of the month - do the math to compare both possibilities!
6. Sell your stuff
Think about decluttering your home of things you don't need anymore - you might be able to sell them online and make a bit of money from it.
7. Try making money online
There are lots of websites where you can make money freelancing (e.g. selling photos online) or doing some kind of job (like translations or transcriptions) or even answering surveys.
You can also think about starting an online business.
There are tons of possibilities out there!
There are tons of possibilities out there!
8. Start investing
Savings deposits are no longer a great way to put your money away for your retirement. This is because the interest on those products is at an all-time low and because inflation lowers the value of your money through time.
The money you save up today won't be worth the same in 20 years. If the interest rates on savings' accounts were higher than the rate of inflation, they could help make up for the decrease in the value of your money. However, the interest is very low these days, so your money is just sitting there losing value.
On the other hand, the interest you get from investments can be much more interesting. That is why it's a very good idea to start investing money, after you have enough saved up.
If you want to start investing, you should try to find a strategy that works for you - something that is in line with your comfort level with risk and that isn't too complicated.
For non-professional investors, it's best to choose lower risk investments. Lower-risk investments will obviously have lower gain prospects but they are more guaranteed. And since you probably want a long-term investment (something to make you money for your retirement), then these are more likely safer and still profitable investments.
Besides that, you'd do well to diversify your investments (that means choosing different investments to focus on - different companies, investing in different markets, etc.). This will make your investments safer because if something goes wrong with one of them, you won't take that big a hit.
So, are you ready to start taking control of your expenses and make your money stretch?
The main idea is that if you allocate your spending more efficiently, you'll be able to do more of the things you've always been wanting to do and lead a happier life!
However, sometimes you just need to make more money, in which case you might be better off getting a side-hustle to make some extra cash.
Do you have any other good tips?
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