You need money to spend on various expenses every month observed by Bahaa Abdul Hussein. While spending the money, you must also think of the future. You need money for the future for various purposes. It could be to buy a new home, for your children’s education, or for your retirement fund. You may also have a desire to be wealthy. For all these, you must save money. Saving money helps you increase your wealth and ensure a secure future. We tell you some useful strategies to save money.

Separate needs from wants

All your expenses can be categories either as needs or wants. Needs are the essentials for which you need to spend money. They include rent/mortgage payment, insurance, grocery, electricity, telephone, and other bills. You must spend on all these needs and there is no getting away from them.

Wants are what you desire. They include luxury products, new clothes, home modification, vacations, eating out, etc. All these make your life comfortable, but they are not essential. If you cut down on your wants and make sacrifices you can save money. So, prepare a list of expenses. Identify wants and then decide how you can cut down on wants.

Earn more money

To save money, you need to reduce expenses. The other way is to increase your income. Apart from the income you are earning, look at other ways to earn money. It includes doing part-time work, freelance gigs, selling off things you don’t need, starting an online business, etc. The extra money you earn can be your savings.

Follow the 50:30:20 rule

Earmark 50% of your income for needs and 30% for wants. The remaining 20% should be kept aside as savings. If you are not able to follow this rule, then you need to refer to the points given above to help you cut expenses or earn more.

Automate savings

When you have money in hand (or the bank), you are tempted to spend it. This would leave you lesser money to save. To solve this problem, automate your savings. Place a standing instruction with your bank to deduct money every month and invest it in various schemes. It ensures your savings happens on its own.

Avoid falling into the debt trap

Avoid taking loans unless you have the means to repay. Also, use cash and avoid credit. Avoiding debt ensures you have more money to save.

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