5 habits of people who save money

May 28th, 2015

5 Habits of people who save money

Are you worried for not having emergency savings? Do you live pay day to pay day? Do you have something saved for a rainy day? Or for your retirement? Don’t despair.
We can learn from good savers behaviour to improve our own money situation.
Follow their lead and you can end with a fortune.

Check these 5 habits of people who save money

1. Live as simple as possible.

This might mean something different for each one of us, however, most of us imagine that “living simply” means deprivation or letting go of whatever you love. The truth is, though, that you can have a life just as good without spending a lot of money. Even better, this can help you understand the value of things (not just the price of them!). How much of what you have in your life do you truly want? All the things you have, are they all really necessary? Do you need them? Learn to love what you have instead of getting what you want (and perhaps don’t even need).
You still can have what you want and live simply by choosing better. For example, you might love gourmet food, but not care much about clothes. If you choose good food over branded clothes, you can always pay a visit to your local charity shop. Although saving money on clothes doesn’t give you license to overspend on food. You still need to cut back on shopping or other areas of your life to save money!
People who save money do exactly this: They cut back on the things that aren’t important to them and save money instead. You might be surprised at how much you spend on things that aren’t necessary.

2. Every little bit adds up

Once you break a banknote, the money is gone! Not anymore. Every penny counts. If you save few pounds a week, it will make a difference. Just think about this… if you can afford to save £15 a week for 20 years, you will have £15,600!!
Certainly good money for an exotic holiday, a new car or to give to your child or grandchild on their 25th birthday.
People who have been saving know that every bit helps. Everything from buying smart, sell things on eBay, do mystery shopping on the side, open bank accounts that offer free money as incentives or any number of other things.
They don’t talk themselves out of saving this money because they’ve looked at how it multiplies their savings.

3. Grab free money

All employers now have to legally offer some sort of Pension scheme. The good thing about paying into a pension scheme is that your employer and the Government also pay into it too. You get tax relief at your highest tax band. So effectively, the Government is actually giving you some of your money back! Also make sure that you are claiming all the tax breaks you might be entitled to. For example, most people who wear a uniform to work can apply for a tax rebate for washing it. Ok, it might not be much, maybe £60 a year, but that’s YOUR money and you’re entitled to it!! Also claim for things like professional subscriptions, etc.

4. Plan how to spend and save.

If the idea of budgeting or cutting back puts you off a little or even scares you, then you are not alone. When we hear the word ‘budget’ we think of restrictions or something that will make our lives harder and perhaps even less happy… Instead, we should see a budget as a method to achieve our dreams. Stick to your budget and you will know exactly how much you can spend and still be able to achieve your long-term savings goals.
Once you know where your money is going, you can then better control that. You can decide if that subscription to that magazine you never read is really well-spent money… or is it something that you can get rid of to free up some cash? Are you also paying for other things you don’t use? Ditch them and see the cash roll into your bank account!! And whilst you have that nest egg in the bank, then you won’t have any worries about unexpected bills or the washing machine breaking down. You’ll have lifted those worries off your mind by a little bit of financial planning. It’s not brain surgery, you know!

5. Understand how the brain perceives time.

One of the hardest things about saving is resisting the temptation to spend your cash on something else! We all get seduced by advertising and convinced that we should be spending our hard earned cash. And that is exactly the point, it’s our hard earned cash! The best advice is to never buy something the moment you see it. Go home, think about it and ask yourself ‘Do I really need that?’ You might be surprised by how many times you realise you don’t! That pair of shoes that look cute, but in the cold light of day get consigned to the back of the wardrobe, or that sandwich toaster that will never get used more than once. We NEED to be SMART without money!!
The thing is, once you’ve spent your money, there’s usually no way of getting that same value back! We have to be smarter than that!

Is there any other habit of people who save money that you’d like to share with us? We’d love to hear your comments about this.

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