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Wondering how to save money, track your spending and income in the easiest way, and what tools can help with that? Read on to know what you can do and what option better fits your needs.
Let’s face it, people who say that money is not important are either those who have mastered the art of downshifting or those who are not totally honest. Money is the blood of the modern world, it streams through all parts of our daily routine: we buy our morning coffee and we watch the cable TV in the evening, for which we have also paid with money. Money is one of the greatest inventions of humanity, but it does require great appreciation and care. Our educational institutions do not bother to teach the students even the basics of financial literacy. And here is the first lesson: it is not how much money you make, it’s about easy ways to save money. When we ask someone “How do you save money?”, we can receive no answer as this issue is really questionable. Well, being economical may seem like a daunting task for someone, but we will show you the top ways of saving money while loving this process.
Let’s start being financially productive!
The Rule of Four Wallets
This method of saving cash is best suited to the family budget. Teaching young families how to save money at home is of paramount importance because they are the cornerstone of our society, and it is a well-known fact that financial hardships usually lead to divorce. Therefore, they need to plan the family budget wisely, that is when the simple way to save money, called the rule of four wallets come in handy.
It can be described with the following formula which can be called “How can I save money?”:
AMI – 10% RF – RE – SM/4 = Wallet
AMI – The aggregate monthly income of both family members.
RF – reserved funds.
RE – regular expenses (electricity, gas, water and other bills)
SM – savings & mortgage (or other credit-related obligations, vacation savings etc.)
Let’s say that each family member earns $2000/month. In that case, the AMI = $4000. The RE = $500; the family pays the mortgage of $500/month and saves $200 for summer vacation.
$4000 – $400 – $500 – $500 – $200/4 = $600 per wallet.
As you could probably have figured out, the monthly expenses are divided into four wallets. If the family manages to spend less than $600/week, the remainder may be transferred to the next week’s wallet or to the reserved funds.
It is rather simple but effective method that not only resolves the issue of how to save more money and helps to avoid money-related quarrels but also allows people to enjoy the sweets of life, like going on vacations.
Make Use of a Notebook or an Application
As we have mentioned earlier, knowing the answer to the question, “How do I save?” is key to the financial stability. However, in order to save up, you should be aware of how you spend. You will be amazed at how much money we spend on things we actually can survive without. Get yourself a good notebook or download an app and start keeping track of even smallest expenditures today. Sum up all your expenses at the end of each day, week, and month, so you will have a clear view of your costs and expenses and will see – how you save your money or don’t do it at all.
Putting it in handwriting could be really annoying (let’s be honest), so take advantage of technology and download Cubux, which is yet another great way to save money. Our app, developed by Fitzcarraldo s.r.o., is an indispensable tool thought out to keep track of household finances. You can manage your expenses and income, plan your budget, and take control of all transactions via a single and clear app. You can even categorize all expenses, so you will know how much money you spend on food, clothes, entertainment, or education (Why is it necessary to categorize all expenses – read here.
But we don’t have to use sophisticated technology to know how most people can lessen their outlay and live a better life. Here are few useful tips:
- Eat Healthy. Some may say that eating healthy is expensive but it is not true. There are many ways to organize a healthy and varied diet, it just requires some research and price-checking. You will be amazed at how much money you can save just by eating healthy at home.
- Quit your bad habits. That goes without saying: smoking, drinking and other “fun” stuff not only damages your health but also your wallet. So, throw away the cigarette and start saving cash.
- Spend less on entertainment but more on books. The best investment is the investment in yourself. Trade a TV show or a sports event for a great book, and you will not only get more joy out of it but also expand your intellectual horizons.
Saving money is an obligation for every responsible adult. However, the word “obligation” has a bit of a negative implied sense, therefore some people tend to avoid even speaking about saving money, they prefer to live on a day to day basis. If you are one of those people, we really hope that this article will change your opinion, show us how you can save money, and help transform obligation into a fun and useful activity. Just follow these good ways to save money and be effective with Cubux!