02 Mar Save Money
The use of payday loans can be minimized and even eliminated if people saved more money then they spent. Saving money is one of the hardest things to do for most medium to low income earners. This is not to say that the rich don’t also have problems with saving money; but obviously the more you have the less difficult it is to save larger portions. Typically, after paying bills and putting food on the table, lower income earners have a lot less to put aside. Regardless, we’ve all experienced problems with either saving money or not saving enough. Saving money doesn’t have to be hard; here’s a few tips on how to re-gain control.
Give Yourself a Juicy Reward
The main reason saving money is so hard is because it feels like your losing in the short-term. Putting away one hundred dollars every week may seem like suffrage to your wallet. It gives you less money to play around with and as such, gives a lot of people anxiety. Saving money can be fun if you give yourself something you really want but only once your reached a certain amount of savings. Typically the reward should cost ten to twenty percent of the savings amount (beginners should start with a slightly higher percentage). That means if you want a pair of shoes that cost one hundred dollars you must save at least one thousand dollars before buying those shoes. The theory here is that if you don’t have at least one thousand dollars in savings then you likely can’t afford a hundred dollar pair of shoes.
This saving method can also be applied to all of your spending. The difference here is that you need to use a higher percentage for your rewards. For example, let’s increase the percentage to forty percent from ten percent. If you go to the grocery store to buy box of hamburgers that cost ten dollars you need to be able to put away twenty-five dollars before you can buy a box of burgers. You’re probably thinking that’s a bit extreme but if you can’t afford to buy burgers and put away twenty-five dollars you should probably be eating bread and butter for dinner instead. Obviously, this method is difficult to calculate on an individual item basis when shopping. Instead, select how much you want to spend on groceries and divide by 0.4 to calculate how much savings you need to have before you can spend that much money on food. For instance, the idea is to say, ‘if I put away three hundred dollars this month from my pay check I can buy one hundred and twenty dollars of groceries’.
Go Hard or Go Home
You won’t be young forever, so if you don’t save aggressively you won’t have much in your elder years. You won’t see much progress if all you’re saving is ten dollars from each pay check (if this is you, smarten up). You need to make a commitment to saving money or you’ll never have any of it. Get a piece of paper and right down your biggest fears. Keep this paper in your wallet and look at it every time you feel like not saving money. Chances are, something on that list, if not everything can be avoided with money. Aggressive savings means learning how to tell yourself no and mean it. If you have trouble telling yourself no, then you need to work on self-control. There are tons of on-line resources that aim to help shopaholics with self-control. Do yourself a favour by seeking professional help. Your savings is more important than your pride.
Lock it Away
Sometimes the trouble isn’t saving money, it’s not spending it once it’s put aside. One way to keep your money out of reach is to open a term deposit between 30 days to 5 years. This will help with the urge to go into your saving because you can not break a term deposit until its date of maturity. If you’re going to put your savings in a bank account make sure that you do your research. All savings accounts were not created equal. Some Canadian banks offer up to 5% on most investment savings accounts but you have to find them. Every participating bank has different minimum deposit amounts, term lengths and interest rates. Tangerine, which was once ING Direct, seems to have some of the best offers to date. Try to find an account that offers at least 2%.
Getting a payday loan can be eliminated if you focus on saving more money. Saving money doesn’t have to be a chore, you can use the tips found above to make it fun and rewarding. If you have a saving tip that has worked for you in the past, please share your ideas with us.