It’s tough to save money when you have a family. You know that you want to be saving as much money as possible to help your children to attend the college they want to, fund their start-up, or pay for a wedding. At the same time, you still have to pay all of the bills each month. For a lot of us, we can end up spending more than we mean to each month and then struggle to save anything at all! It is usually possible to start saving some money if you are strategic about it.
Track your spending
First things first: You need to have a realistic picture of how much you are working with before you can start deciding how much to spend. Go through your bank statements and start making a list of everything that you spend each month. This includes things like your rent or mortgage payments, utility bills, car loan repayments but also on things like meals out and coffees that you bought on the way to work. It’s helpful to categorize these expenses so that you can see where the bulk of your money is going. You may also find that the simple act of starting to be more aware of what you are spending, helps you to spend less in the future.
Make a budget
Once you know what you are spending at the moment, you are in a better position to make a budget that you can stick to each month. Be sure to include a monthly savings target within your budget that is non-negotiable. This will ensure that you are actively saving each month, which will make it much easier to reach your savings targets.
Tackle your debts first
If you are currently in debt, it’s important that you tackle these before you start thinking about saving. Usually, the amount of interest that you are paying on your debts is far higher than any interest you could earn on your savings, so you will save more by clearing your debts first.
When tackling your debts it’s important to be strategic. You could consider loans for debt consolidation that allow you to pay off some or all of your loans with a single loan, and therefore only have one monthly repayment to worry about. If you get a consolidation loan with a good rate of interest, this can also enable you to save money over time, but it is important to shop around.
Find ways to cut spending
Once you have your budget, you can start looking for ways to save money each month. For example, you could cancel subscription services that you no longer use, or you could try cutting down on things like takeaway coffee or takeout food.
Set savings goals
Finally, if you want to stick to saving each month, it’s important that you have savings goals to work towards, as otherwise, it will become tempting to spend instead!
Set realistic and time-bound goals with a purpose, based on how much money you can realistically afford to save each month. For example, you might decide to save for a holiday in a year’s time and for a college fund that will be used in 10 years’ time.