Earning money is not easy, so it’s best to make sure you are able to save some of that hard-earned money and secure a better future for yourself and your family.
Having some savings in your bank account can also be helpful in times of unexpected events, like that of the pandemic that we recently experienced. We never expected that some people would suddenly lose their jobs or stop working because of COVID19.
In this article, we will discuss some practical tips you can apply in your life so you can finally start saving money.
You may be an employee earning minimum wage or someone earning big but still not able to save. These tips are for you.
1. Have a Proper Mindset
You have to have a positive mindset about saving and about money in general. You have to understand the importance of saving and how it can help you achieve your financial goals.
Having a positive mindset toward saving will help you save more money because you know that saving money is a positive thing that will also make you feel good when doing it, instead of feeling obliged to do it.
A positive mindset about money will also help you manage every penny you get.
2. Create A Budget
Since you have listed down all your expenses, it’s also best to create a budget. This way, you’ll know your limits on spending and learn to say no to things that you know are not part of your budget. You can also explore different methods of budgeting your money, like the envelope budgeting method.
Creating a budget is very helpful for you to be able to focus on your needs. You can look into our tips for creating a budget and make a copy of our Budget, Income and Expense tracker below.
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Income and Expense Tracker
Set your Goals and keep track of your expenses to know where your money is going. Subscribe to get updates from me like an update to this tracker.
3. Set Up Clear Goals (Saving Goals)
Setting up goals is part of life. If you never set up any goals, you have to start doing that now.
Setting goals will lead you to a clearer path, this will inspire you as you go because you know exactly where you’re heading. Compared to just moving forward and just doing whatever it is that needs to be done. You will never really appreciate small achievements because you don’t know what the goal is.
So start setting up goals in life, including financial goals.
You have to think of something you want to buy and start putting value into it. For example, you might want to buy a cellphone, think about the brand and unit you like and search for the cost of that particular phone and compute how much you need to save on a monthly or weekly basis to get the amount you want.
It’s simple right?
That’s precisely how you will compute your financial goals, no matter how small or big it is.
Then monitor it after three months, and check how much you have saved so far. If you’re not able to complete your supposed savings in three months, try to catch up by saving more next month.
If you’re able to reach your goal, then celebrate this win and continue saving. This way, you will get into the habit of saving. Once you are able to establish the habit, saving a bigger amount will not be hard for you anymore.
Remember to take it slow and be kind to yourself. Just keep saving, even if it’s not the exact amount. Just continue until you reach your goal.
4. Decide to save a fixed amount every payday or every week
Think of a specified amount you will be willing to set aside every month. It’s best to start small, so it won’t be hard for you to keep this every time you receive your paycheck.
You can probably start with 10% of your income to go directly to your savings or 5% if you still think 10% is a huge amount to be taken from your savings.
The idea here is to practice the saving habit. As you continue to do this, it will be easier for you to automatically keep some amount every time you get paid.
5. Set Up an Automatic Deposit/ From your Salary Account to your Savings Account
Setting up an automatic deposit is particularly helpful for employees who earn a fixed income every month or twice a month and typically a fixed payroll date.
You can contact your bank on how to set up an automatic deposit.
You might need to have a separate savings account from the same bank, aside from your current savings or payroll account where you are receiving your pay. If it’s going to be a different bank, this may not be applicable, or you might have to pay transfer fees every time. Automatic debit set-up may not be practical if it’s going to a different bank.
You can set up a fixed amount of 1000 pesos or more to be automatically transferred every 15th or 30th of the month. You may choose a date when they can debit the amount you prefer.
6. Save your Raises
Another way to help you save is to save any pay raise you get or even bonuses.
One of the mistakes we make is to increase our spending every time we get a raise. But if you can live with the lower amount of pay you previously received, you can continue living with that amount and have the additional income go directly to your savings.
You can pretend to forget about the pay raise and set up the amount instead to be automatically transferred to your savings account.
Continue doing this as you get a raise, and in a year or two, you will be able to save and achieve your savings goal for sure.
7. List Down Expenses
Keeping a record of your monthly expenses will help you evaluate where you are spending most of your money. Listing down your expenses will help you realize where to cut down your costs and divert them to your savings.
Doing this will help you achieve your goals faster.
8. Avoid Unnecessary Expenses
Saving money involves avoiding unnecessary expenses by distinguishing between needs and wants. Create a budget, prioritize essential spending, and cut back on non-essential items. Make informed purchasing decisions, delay non-urgent buys, and seek better deals.
This approach builds savings, achieves financial goals, and prepares for unexpected expenses.
9. Stay Away from Shopping Sales or Online Shops!
Have you ever bought something online, only to realize you actually don’t need it.
Checking those shopping apps sometimes makes us buy things that are considered as wants. We just bought them because they look nice in photos or are on sale. The best way to save ourselves from these purchases is to stay away from them.
If you can stay away from unnecessary online purchases, you’ll be able to save money that can help you achieve your financial goals.
If you’re always buying online, why not challenge yourself?
Instead of buying something, think of putting that amount in your savings account. Try it for a year and see how much you’re able to save.
10. Stop Unnecessary Subscriptions
Save money by canceling unnecessary subscriptions like Cable TV, Music Services, or magazine subscriptions you don’t really get much value of these days.
Evaluate if these services are truly essential and align with your budget.
Cutting back on subscriptions eliminates unnecessary expenses, allowing you to allocate funds more wisely toward essential needs and financial goals.
11. Cook your Food at Home
Cooking your food will help you save a lot of money than buying your food outside or eating out, plus you are sure you’re eating healthier food if you cook it yourself.
The cost of food from restaurants varies, but most restaurants or fast food chains charge up to 300% markup so imagine how much money you can save if you cut out on eating in restaurants or buying food often.
12. Avoid Lending Money to Relatives or Friends
Refrain from lending money to relatives or friends. By avoiding these financial commitments, you prevent potential strain on relationships and safeguard your own financial stability.
Instead, consider suggesting alternative ways to support them or help them explore other resources.
13. Quit Any Vices
If you are smoking or have other vices. Compute how much you spend daily on cigarettes, for example, and multiply this by 30 days, then 12 months, and for years. You’ll see how much you can save if you quit smoking.
Plus, you get to have a healthier body, so this is a very healthy and helpful way to save money.
14. Avoid Bad Debts
Borrowing money is one of the norms that pull most Filipinos down. It’s not wrong to borrow money if you know exactly where to use it.
Borrowed money should be used to earn more money. If you’re going to loan money for a business, make sure that your expected income is more than the loan’s interest..
Avoid borrowing money to buy things like cell phones or for a birthday celebrations, these are things we can put off until we have extra money. If you want to buy something, save for it.
15. Take care of your Health
Choosing a healthy lifestyle in the Philippines can save you money.
Regular exercise, a balanced diet, and enough sleep can help prevent costly health issues like diabetes and heart conditions. This means fewer medical expenses and lower chances of needing expensive treatments or medications.
By adopting preventive measures, you can catch potential health issues early, avoiding hefty medical bills.
Plus, a healthy lifestyle boosts productivity, reducing missed workdays and potentially increasing income. It’s an investment in a longer, more active life, lessening the financial strain of age-related health concerns.
Encouraging family health can further cut down on medical expenses, and overall, a healthier lifestyle contributes to a better quality of life, saving money on potential compensatory expenses for well-being.
16. Join Money Saving Challenges
Sometimes saving may be more exciting if you’re trying to compete with someone else. It may also be more effective if you know that you’re doing it to challenge yourself.
This may be a more effective way of saving money for people who are more competitive.
If you think this is something that can help you save money, you can read more about the different money-saving challenges you can try to save more money.
17. Discuss your Saving Goals to Family Members
By discussing your saving goals with family members, you foster transparency and cooperation in managing finances.
This collaborative approach helps ensure everyone is on the same page regarding financial priorities, reducing the likelihood of unnecessary expenses and encouraging shared efforts toward common savings objectives.
It promotes a supportive financial environment where family members can work together to achieve mutual financial goals.
Conclusion
Saving money is not easy when you are earning minimum wage and having dependents, but start doing it anyway. No matter how small the amount is, just do it.
Apply each tip and see how much you can save in a couple of months.
If you still really think there is no way you can save from what you are earning right now. Then maybe it’s time to look for other ways to earn extra income.
Don’t be afraid to explore new opportunities.