Money Saving Tips: Developing Healthy Money Habits to Stay Within Your Budget

Money Saving Tips: Developing Healthy Money Habits to Stay Within Your Budget
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Point Editorial

Making money and saving money are not mutually exclusive. Both are actually two fundamental pillars of financial independence. Being able to do both prudently and efficiently is necessary when it comes to getting ahead financially. 

This is where a budgeting plan comes into play. Having a structure that guides you as you make financial decisions can alleviate stress and keep you informed. Fortunately, various budgeting styles exist, so finding one that works best for you shouldn’t be a problem. 

To learn more about ways to save money and how to start a budget of your own, read on. 

How to start saving money

First things first: you need to be aware of – and consciously practice – healthy financial habits. That includes how you spend money as well as how you put it away for a rainy day, an emergency, or the distant future. 

Developing a budget is a simple way to help you practice healthy financial habits. If you are diligent and budget over an extended period, you will begin to see progress much quicker. 

Easy tips to save money

Record your expenses 

If you’re unsure where to begin, always start with your expenses. Write them down. Keeping track of not only what you’re spending your money on but how much you’re spending is crucial in building awareness of your habits. You can also use your credit card statements to double check the numbers if you’re unsure. 

Budget for savings 

Establishing a plan to manage expenses is good, but it should also account for savings. With a budget, you weigh all your costs against your income. You must include recurring expenses such as credit cards and rent payments, as well as grocery and car insurance bills to have an accurate picture of where you stand financially. 

Additionally, you can set up automatic transfers so that a bit of your income is added to your savings periodically, and you don’t have to worry about doing it manually. 

Decide on your priorities

Creating priorities is essential. Always prioritize your most immediate needs first, like food, housing, and transportation. Savings come next.

Pay yourself first

The “pay yourself first” method is one of the first habits you should start practicing immediately. This refers to diligently funneling away a portion of every paycheck you earn into savings.  

Experts recommend that you allocate 10–15 percent of your salary to savings. 

Find ways to cut your spending

Cutting back on non-essential items like clothes, eating out at restaurants, or entertainment ventures is a great place to start. You can also consider canceling magazine or television subscriptions. This also applies to brands. Popular clothing and food brands are often more expensive, so buying generic items usually reduces costs. 

Also, keeping an eye out for discounts, deals, cash-back programs, and coupons is never a bad thing either. 

That said, one tool to keep in mind when looking to adjust your financial habits is Point Card. Designed as a tool for those who want to spend their money while receiving exclusive benefits, like unlimited cash-back on all purchases, Point comes with fraud protection with zero liability. It also has no interest rates, so you’ll be able to save money while knowing that Point is working hard for you in return. As a cardholder, you are also eligible for bonus cash-back on subscriptions, food delivery, rideshare services, coffee shops, and more. Plus, Point Card comes with car rental and phone insurance, not to mention travel benefits. 

Put simply, Point is an excellent tool for intelligently navigating your financial journey. 

Avoid using credit to pay your bills

While having credit is convenient, you must make monthly payments, and those can accumulate quickly. 

Check your insurance rates 

Regularly reviewing your insurance coverage and rates will help you stay on top of any sudden policy changes or errors.

Set savings goals 

Establishing savings goals, especially if you intend to splurge on a major event – whether it’s a vacation, your retirement, or a wedding – is a simple yet effective measure as it gives you something to work toward. 

Dividing your objectives into short-term and long-term goals is another method, as you’ll be able to see your progress on several levels. Typically, short-term enterprises are goals that take one to three years to accomplish, such as buying a new vehicle. The latter refers to enterprises that extend beyond four years or more, like a down payment on a house or building up savings for your children’s education. 

Setting smaller goals along the way is a wonderful motivator in the meantime, whether that’s a new haircut or a birthday present. Not only does it reinforce money-saving habits, but you’ll be able to reward yourself, too. 

In this case, setting up a retirement plan is another way to save. If you don’t have one already, consider opening an IRA account, for example. 

Pick the right tools 

By tools, this means the correct type of bank accounts. A basic savings account is good for short-term goals, while an IRA or investing in stocks can bring in returns over time. 

Keep in mind, however, that each of the accounts may come with fees. So while it is good to have a variety of safety nets, it can involve added costs.

Reduce energy costs

These types of bills can be high, but there are easy ways to lower them. Taking shorter showers, repairing leaky and squeaky plumbing, and replacing your bulbs with LED lights can significantly reduce your utility bills. If you can, replacing dated appliances with energy-efficient ones will help as well.  

Saving money with a budget

Again, having a budget is one of the best ways not only to manage your money but to hold onto it as well. There are many types of budgets, but it's all about finding the one that works best for you. Most budgets account for every dollar you earn, and while it's best to realize that no plan is perfect, having a guide that promotes personal responsibility is never a waste.

Described below are the steps to start saving money with a budget. 

One: Know your monthly income. This is crucial. If you don't know how much you're making, you cannot spend or save wisely. Make sure your calculations factor in taxes.

Two: Choose a budgeting plan. The most common methods are the 50/30/20 plan, zero-sum, the anti-budget, and the money flow plan. 

50/30/20 plan 

Besides being one of the most popular strategies, it is also the most straightforward since the instructions are quite literally in the name. After paying your bills, you should be spending approximately 50 percent on basic needs, 30 percent on your "wants," and 20 percent should go toward savings.

Zero-sum

This is a very detail-oriented plan. It's named “zero-sum” because the amount of money you earn plus the amount you spend should be balanced and total zero at the end of the day. With this plan, every single dollar has a purpose. 

Anti-budget

Despite the name, this is indeed a budgeting method. Unlike the others, it has a more general approach, where users focus on overall priorities instead of breaking down every expense. 

Money flow

This method primarily operates on automatic money transfers for recurring payments. This way, you won’t have to worry about missing deadlines. The funds automatically leave your account on a specific day, usually monthly, and that’s it. So, you only have to focus on your wants and your savings. 

Professional services and online platforms can help you budget if you are unsure about navigating this realm on your own. 

Three: Be prepared to make modifications. Regardless of the specific type of plan, a reasonable budget allows flexibility. Your expenses will fluctuate from month to month, and emergencies happen. That's why your method shouldn’t be so strict that spending an extra few dollars here instead of there, if necessary, will completely throw you off course. Don't hesitate to go back and review your plan if you have to. Budgeting is all about preparing and adopting good habits. 

Four: Set goals. Ultimately, a budget helps you live comfortably and achieve your goals at the same time. A budget ensures accountability, but it also encourages you to work harder because you know that rewards are waiting for you just around the corner.

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Point Editorial
A group of writers, thinkers, & designers from varying backgrounds — all part of the Point Card team. Sharing perspectives on concepts in design, finance, and culture through an everyday lens.
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