25 Money Saving Tips - How to save money wisely

Do you want to save money for your future. Here are the great ways to save money wisely.

Set a savings goal

Start by setting a savings goal. It should be measurable, achievable, realistic and timely. You might feel ambitious and set a super-high savings goal, but you’ll also be setting yourself up for failure.

When deciding on a savings goal, think of a specific purchase or benchmark you could realistically reach in 12 months. The goal should require self-discipline and a little sacrifice when it comes to spending (it is a goal after all), but you shouldn’t overreach.

Then, find a friend or family member who can hold you accountable, or write the goal down in a place where you’ll see it every day, like your planner.

Choose a savings account thoughtfully

Be picky about where you keep your savings. Savings accounts vary widely when it comes to interest, fees and minimum balances, so do your research and find the one that’s perfect for you. Consider extra charges like monthly service and ATM fees.

While the interest rate might sound minimal at first, it adds up. And every little bit counts when you’re saving toward a specific goal. Check out online banks too; online savings accounts sometimes have higher interest rates.

Compare savings accounts to find the right one for you.

Make saving automatic

You might not have the self-discipline to set aside a portion of your paycheck every month for savings. So, make your contributions automatic. Banks often offer free services that will transfer a fixed amount of money from your checking to your savings account every month.

Or, ask your HR department if you can direct deposit a percentage of your paycheck every month into a savings account.

Establish an emergency fund

While your savings account might double as a rainy-day fund, if you’re super savvy about saving you’ll have a fund dedicated solely to emergencies. Your savings account might be for big purchases — like for a down payment on a house or car — but you should not touch the money in your emergency fund unless there’s an actual emergency. If you lose your job or have to go the hospital, you’ll have something to fall back on without having to sacrifice that big purchase you’ve been saving for.

Typically, an emergency fund should have enough to cover four to seven months’ worth of expenses. Experts recommend starting your fund with small goals — such as saving $1,000 — and then working your way up.

Looking for a great home for your emergency fund? Shop Bankrate today for top rates on savings accounts.

Monitor your monthly expenses

For one month, track every single purchase down to the cent. You’ll know exactly where your paycheck is going and which areas you’re overspending on. You’ll feel more in control of your money, and it’s a key step toward forming a realistic budget.

You might realize, for example, that you’re spending an obscene amount on coffee every week. Once you’re aware of that, you can limit your coffee-shop stops to three times a week and put the rest of that money into savings.

Set a budget

Once you know your spending habits, you can draw up a realistic budget. Budgeting will help you save by helping you cut out frivolous spending. It might be a bit of a trial-and-error process at first; you have to figure out what works best for your lifestyle.

You don’t have to cut out all of the fun stuff, but you do need to pay your bills on time and eventually meet your savings goal.

 Be smarter with shopping

Be a savvy shopper. A few ideas:

Rack up rewards by signing up for loyalty programs at your go-to stores.
Sign up for a warehouse club and buy in bulk.
Clip coupons when you can.
Plan your shopping trips around sales and daily deals.
When shopping online, check out price-comparison websites or use browser plugins to make sure you’re getting the best deal. Just because something is advertised as being discounted doesn’t necessarily mean it’s a good deal.

Find the right rewards credit card for you today.

Take advantage of apps

Whether you want to order a car to come pick you up or just want to socialize with your friends, there’s an app for that. So why not use that technology to become a better saver?

There are many apps that help you budget, find the best local deals, and sell your old junk. This year, find one or two apps that will help you save and use them on a regular basis.

Consider a flexible spending account

Explore signing up for a flexible spending account where you work. FSAs are often offered by employers as part of a benefits package, and they can save you money on health care costs not covered by insurance, including copays and deductibles.

After enrolling, you decide how much you want to contribute for the year. That amount is then deducted from your salary over time, before income tax. You withdraw money from the account to pay for certain eligible medical expenses, which are effectively discounted thanks to your tax savings. But you must use up all of the funds within your benefits year.

Check your progress

In order to save effectively, you need to know exactly where you stand with your finances each week. Make a “money date” with yourself every Sunday and go through your transactions to ensure you’re on track with your budget. If you fall off track (maybe you spent too much one week or didn’t sock away a single penny from your paycheck), don’t give up! Get back on track.

When you hit savings goals, celebrate and reward yourself a bit. Saving is all about moderation, but not completely cutting out shopping and spending.

Trimming expenses doesn't have to affect your quality of life. Here are 10 simple strategies that can leave more money in your pocket to spend, save, or invest:

Plan ahead for large purchases. Comparison shop to find the best deals (easy to do on the Internet), and start saving now so you don't need to buy on credit.

Negotiate discounts. Find out if bundling services, such as your telephone and Internet access with one provider, can net you savings.

Minimize high-interest debt. Consolidate high-interest credit card debt in a lower-interest loan, mortgage, or line of credit.

Collect rewards. Some credit cards give you cash back, while others have valuable points programs.

Use built-in benefits. If your credit card offers perks such as free travel or car rental insurance, make sure you're not buying the same coverage separately.

Vacation near home. Many people never see all the tourist attractions in their home town or province; this may be the year for you to check them off your list.

Celebrate "chez vous." For your next family occasion, consider hosting a pot-luck rather than going out to a fancy restaurant.

Buy in bulk. Groceries, home office supplies, public transit tickets, and many other products are often less expensive when purchased in larger quantities. Be careful, though, to buy only items that you actually need and will use.

Be prepared. Open a high-interest savings account and establish an emergency fund so you don't have to dip into your long-term investments if you need quick access to money.

Go green. Saving energy saves money as well as being good for the environment. Consider installing a programmable thermostat, switching to compact fluorescent light bulbs, and upgrading the insulation in your house.

Choose a bank that gives back and gives back plenty

India has no dearth of banks and finance firms, public or private sector ones. Look for one that makes the most sense for you. How are you planning to save? Are you going to open a savings account, going for term insurance plans or mutual fund investment or start a fixed deposit? Almost all banks offer these. But the rates could vary for each product slightly or drastically. For instance if one bank gives more returns and offers on savings account, the other might offer a better rate for home loans. Also look for benefits such as nominal or zero ATM or overdraft charges. Don’t hesitate to contact the bank and ask specifically about all these.

Ideal distribution of your salary

Ask the human resources department at the organization you work at to divide each of salary amount between your checking and savings accounts. If you keep a definite percentage to routinely deposit into your savings so you are not likely to touch that while out shopping or pubbing. Another perk here is that interest rates are normally more for savings accounts than they are for others.

Check on your account from time to time

Sometimes certain receipts and not-all-there-looking charges can give you the shock of your life and hence it is important to keep checking your account every now and then. We may be living in an age of electronic banking, but that doesn’t mean the system is error-free or flawless. Keep all your account sips and bills at least for a week. This way you can keep track as well as cut back on unnecessary spending (like more dine outs than healthy).

Sparing use of ATMs transactions

ATM transactions being easy doesn’t mean that you should go there to withdraw every time you need cash. The ideal thing to do is to take out a set amount every week and limit your spending within that. This way, you won't be compelled to hit up ATMs of other banks and get smashed by ATM charges. To be systematized, you can divide money into envelopes and mark bills, food and groceries, leisure etc. Paying with cash rather than plastic at stores will keep you more grounded.

Plan cash withdrawals

If you end up using ATMs more often, plan each visit sensibly to evade usage fees. The first few times, you are allowed free transactions, after which it will be charged INR 20 per transaction and INR 10 per enquiry. Stick to your own bank’s ATM as much as you can. When it is time to take out cash, see if you can swipe your card.

Settle outstanding credit card dues

Disbursing your credit cards bills and even keeping one (for emergency) rather than a host of them is one way to save lots. Most credit cards have yearly fees and higher interest rates. So unless you are using one regularly, it is just a money-sucking piece of plastic.

Record your expenses

The first step to saving money is to figure out how much you spend. Keep track of all your expenses—that means every coffee, newspaper and snack you buy. Ideally, you can account for every penny. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Consider using your credit card or bank statements to help you with this. If you bank online, you may be able to filter your statements to easily break down your spending.

Make a budget

Once you have an idea of what you spend in a month, you can begin to organize your recorded expenses into a workable budget. Your budget should outline how your expenses measure up to your income—so you can plan your spending and limit overspending. In addition to your monthly expenses, be sure to factor in expenses that occur regularly but not every month, such as car maintenance. Find more information about creating a budget.

Plan on saving money

Now that you’ve made a budget, create a savings category within it. Try to put away 10–15 percent of your income as savings. If your expenses are so high that you can’t save that much, it might be time to cut back. To do so, identify non-essentials that you can spend less on, such as entertainment and dining out. We’ve put together ideas for saving money every day as well as cutting back on your fixed monthly expenses.

Choose something to save for

One of the best ways to save money is to set a goal. Start by thinking of what you might want to save for—anything from a down payment for a house to a vacation—then figure out how long it might take you to save for it. If you need help figuring out a time frame, try Bank of America’s savings goal calculator.

Here are some examples of short- and long-term goals:

Short-term (1–3 years)

Emergency fund (3–9 months of living expenses, just in case)
Vacation
Down payment for a car
Long-term (4+ years)

Retirement
Your child’s education
Down payment on a home or a remodeling project

Decide on your priorities

After your expenses and income, your goals are likely to have the biggest impact on how you save money. Be sure to remember long-term goals—it’s important that planning for retirement doesn’t take a back seat to shorter-term needs. Prioritizing goals can give you a clear idea of where to start saving. For example, if you know you’re going to need to replace your car in the near future, you could start putting money away for one.

Watch your savings grow

Check your progress every month. Not only will this help you stick to your personal savings plan but it also helps you identify and fix problems quickly. These simple ways to save money may even inspire you to save more and hit your goals faster.