Successful Tactics for Saving Money

Each month, many of us spend most of our paychecks on rent or mortgage payments, credit card payments and other expenses. Between keeping up with bills and occasionally indulging yourself, you may not always remember to actively save money.
 
However, regardless of the stage of life you're in, it's never too late to learn how to make investments and save money. By following our money saving tactics and tips, you can get started on your quest to improve your financial status and accumulate wealth.
 

Investigate Your Spending Habits

Many people believe that they simply do not earn enough money to consistently transfer anything into savings. This is simply not true.
 
Whether you make $1,000 or $10,000 a month, finding ways to cut down on your expenses can help you gather some extra money to put into your savings. Start identifying ways in which you needlessly spend money by looking closely at your expenses from the past few months.

Ask Yourself the Hard Questions

As you figure out where you are spending money, divide your expenses between necessary and unnecessary expenses. Anything that falls into the "unnecessary" category is a good option for cutting back spending. As you take a closer look at these luxury items and try to decide what you can do without, it may help to ask yourself the following questions:
  • Can I eliminate my storage unit payment by having a garage sale?
  • Can I save gas money by carpooling to work?
  • Can I skip the morning latte and brew my own cup of coffee at home instead?
  • Do I really need that premium cable package?
  • Should I eat out less and cook at home more?
  • Should I reduce my mortgage payment by downsizing to a smaller home?

How to Make a Budget and Stick to It

One of the most successful ways to curb spending and start saving is by making a personal budget and sticking to it. The smart way to do this is to treat your expenses as a percentage of your income. Many experts suggest allotting the following percentages to your monthly money distribution:
  • 60 percent to 70 percent to necessities (rent, bills, groceries, vehicle expenses, etc.)
  • 20 percent to 30 percent to savings
  • 10 percent "fun money" for entertainment, clothes, etc.
Of course, these figures are merely suggestions. However, if you're serious about saving, then these percentages can work as good guidelines.
 
Keep Debt Low
One of the largest barriers to saving money is accrued debt. Student loans, credit card payments and other types of debt can have high interest payments and may be eating away at your earnings. For many, a successful savings plan includes reducing or eliminating any debts. To start getting out of debt, consider allotting a percentage of each paycheck to paying off any money that you currently owe. Making an effort to pay off your debts can put you in a better financial position sooner than you think.

Beginner's Tips for Investments

Once you've successfully freed up some of your income, figure out how to successfully invest it. Stocks, bonds and money market accounts are all great places to put your money, and most experts would suggest that you diversify your investment portfolio.
 
A solid portfolio of short-term, long-term and retirement savings will help ensure that you will always have access to savings when needed. Here is an example of how you might break up your investments:
  • 10 percent of savings into long-term investments (stocks, savings bonds, etc.)
  • 10 percent of savings into short-term investments (high-yield savings account, etc.)
  • 10 percent of savings into retirement funds (401k, Roth IRA, etc.).
Resources
 
Bankrate (2008). 15 Money Moves for Tough Times. Retrieved February 12, 2008 from the Bankrate Web site.
 
Lifehacker (n.d.). Real-World Money Saving Strategies. Retrieved February 12, 2008 from Lifehacker Web site.
 
MSN (2008). 7 Radical Ways to Save Money. Retrieved February 12, 2008 from the MSN Web site.