Take a piece of paper and list all of your fixed expenses, such as your rent or mortgage, your car or house payment, your cable or streaming service, your cell phone, your insurance, your child’s tuition, etc. Add them all up.
Then list all of your discretionary expenditures. You spend this on groceries, movie outings, cocktails, shopping, your daily Starbucks coffee, cigarettes, sporting events, your daily midday snack, and other comparable expenses. If you are unsure of your spending habits, keep track of your spending for two weeks and report back on your findings.
What did you get when you added it all up? Probably a big amount of cash.
And I’ll bet there will be a lot more expenses you weren’t aware of. These are what financial gurus refer to as “phantom expenses” because we are unaware of their existence.
1. Track Your Spending
Tracking your spending is a great way to keep yourself accountable and get back on track if you have been making poor financial decisions. You should start tracking your spending right away. If you don’t know where your money goes, then you won’t know how much you need to save. Start by keeping a daily log of everything you spend. Make sure to note down what you spent it on, how much you spent, and whether or not you bought something necessary. I also can recommend to make a list of things you would like to buy in the future and write them down. With that you can exactly see which amount of money you want to spend for things and also see how much money you would have if you dont buy it.
2. Create a separate Bank Account
Creating a separate bank account is a highly beneficial strategy when utilizing credit cards. By having a dedicated account, you gain the advantage of being able to fully pay off your balance each month, thus avoiding interest charges on your debt.When you make use of a credit card, you essentially borrow money from a third party, granting them the ability to impose interest on top of the initial amount owed. Unfortunately, many individuals find themselves in troublesome situations because they exceed their earnings and struggle to keep up with their financial obligations. Having a separate bank account will help you avoid these problems.
3. Learn to Cook
Learning to cook is a great skill to learn. Cooking is a fun activity that everyone can enjoy. There are many different types of food out there and cooking is a great way to try new foods. Learning to cook will allow you to experiment with different ingredients and techniques. You can also share your creations with friends and family. And on top of that cooking by yourself is a lot cheaper than going out, therefore cooking at home can make you save hundreds of dollars every month.
4. Get Rid of Your Car
If you currently possess a car, it might be worth contemplating the idea of selling it. Automobiles can be quite expensive, and the costs associated with owning one can be substantial. Nevertheless, there are several reasons why you might want to contemplate parting with your car. One compelling reason is the potential for significant savings by not being a car owner. Another reason is that you can reduce your carbon footprint by not driving around everywhere. Also, you can sell your car and put the money towards your savings goals. Selling a car is probably not the ideal thing for everyone but when you are living in a city or when you have good connections to public transportation it can save you money quite easily.
5. Cancel Unnecessary Subscriptions
There are many different ways that you can cut costs. One of the best ways is to cancel unnecessary subscriptions. A lot of people have a lot of subscriptions they are not even using. Many companies offer free trials of their products. These trials are perfect for trying out a product and seeing if you like it. Once you decide that you no longer want to subscribe to the service, you can cancel your subscription. This will stop you from being charged monthly and you will still receive any remaining trial period. To save money you should go through all of your subscriptions and check which one you need and which one you can cancel.
6. Check Your Phone Plan and Downgrade
Smartphones are popular. People love the convenience that smartphones provide. Unfortunately, smartphones also cost a lot of money. If you are currently paying a high price for your phone plan, you might want to consider checking your current plan and switching to a cheaper option. You can always upgrade later on once you have saved enough money. If we have a look at the cigarette prices we are at around 10 USD per pack. If you smoke one pack a day you already spend 3650 USD a year. With this amount of money, you can already pay for a full vacation with your whole family.
7. Sell Your Stuff
Selling your stuff online can be a great way to make extra cash. You can either sell your items at a garage sale or sell them online. Selling your belongings on eBay or Craigslist can be a good alternative. Everyone has things at home which are not used a lot of times. These products can make you a few extra dollars and on top of that, it gives you also more space at home.
8. Stop Drinking
Drinking alcohol can cause many problems. Alcohol consumption causes damage to the liver and disrupts the body’s natural detoxification system. If you drink alcohol regularly, then your body may not be able to properly eliminate toxins, which may lead to health issues in the future. Alcohol is also very expensive. Stop drinking alcohol can save you a lot of money.
9. Quit Smoking
We all know that smokung is everything else than healthy, But also it will cost a lot of money if you are a regularly smoker. Therefore quitting Smoking is extremely helpful to save a lot of money. Nicotine can even cause addiction, weight gain, and respiratory problems. Quitting smoking is one of the best things you can do for yourself and not only for your health but also for your pocket. Smoking is one of the most unnecessary things people spend money on.
10. Think Twice Before Buying
When shopping online, always read the reviews and look at the comments section. You might find out that the product you’re interested in was sold out, or that someone had a bad experience with it. Also, if possible, try to buy from a local store rather than ordering directly from the manufacturer. A lot of times, these stores have a larger selection and they’ll be able to tell you about any potential quality concerns with the product. Thinking before buying stops you from emotional purchases and can save you a lot of money. Before buying things you should write them down first and go through them after and think about if you need them. Most of the time, when you think a second time about whether you need a product or not, you will realize that you don’t need it at all.
These tips will help you save hundreds and thousands of dollars and will bring your dream trip a step closer to reality. Sometimes it’s the things we are not thinking about, which can make a huge impact.
The most necessary thing is that you keep an eye on your expenses and that you track where you spend your money on. Tracking makes it so much easier to see where your money goes and for what kind of stuff. The more you do that, the more you can save this way, and the quicker you will be able to enjoy your dream vacation.