Here’s How to Create a Budget so You Can Start Saving Fast
- Keep track of all of your finances over a 30-day period. This includes all of your income and expenditures.
- Compare your monthly income to your monthly expenditures to assess how much you’re currently managing to save, or how much you’re overspending each month.
- Separate your expenditures into fixed and variable costs. Your fixed costs are expenses that are typically difficult to adjust, such as your rent and utility bills. Your variable costs include more readily-adjustable expenditures such as groceries, entertainment and subscription services.
- Identify any variable costs that you can start cutting back on to increase how much you can put towards your savings goals each month.
- Assess your progress regularly and make adjustments if necessary. If this seems a little overwhelming, there are plenty of budgeting apps available that can help make sticking to your budget easier.
Create a designated savings account
To save money fast, you need to separate the money you spend on your daily needs from the money you intend to save. This means setting up a designated savings account.
By doing so, you minimize the risk of you dipping into your savings funds to cover daily expenses. Instead, it encourages you to stick within your day-to-day budget while keeping your savings safe from temptation!
Automate your savings
If you have a fixed monthly income, consider automating your savings contributions each month. This means setting up an automated transfer from your daily spending account to your savings account each month. By automating your savings, you further reduce your chance of using these funds to cover your daily expenses.
To make saving a little easier, consider creating your own. Rules is an in-app feature that lets you automatically move money between your main account and your Spaces. It’s a great “hands-off” way to kickstart your savings.
Put a spending limit on your card
A great tip for saving money fast? Set a limit to how much you can spend on your credit or debit cards. This stops you from overspending and encourages you to reassess your daily expenditures in advance. Many banks offer this service.
Use the envelope budgeting system
Another great life hack to help you save money fast is to use Dave Ramsey’s envelope budgeting system. This means taking your monthly income out of the bank in physical cash (yes, all of it!) at the beginning of each month and allocating it into separate envelopes.
Each of these envelopes should represent one of your budgeting goals. So, you’ll have envelopes for your fixed costs (e.g., rent, utility bills), and envelopes for your variable costs (e.g., clothes shopping, eating out, groceries). By paying for everything with a fixed amount of physical cash, you’ll ensure that you stay within a certain budget for each expense type.
Cancel any unused subscriptions
Subscriptions are a money-making dream for a lot of companies. This is because once a customer subscribes to their service, they’re more reluctant to cancel their subscription—even if they hardly ever use it.
This, in large part, is due to the sunk-cost fallacy. When applied to a subscription service, the sunk-cost fallacy means that cancelling a rarely used subscription is hard, as you’ve already paid so much money for it. Therefore, canceling the subscription would mean accepting that all the money spent on it up until that point has been wasted. But, by delaying canceling the subscription, it still feels like there’s a chance the service might eventually be used.
In general, though, few of us ever fully use our subscription services to their fullest. So, it’s more cost-effective to cancel any unused subscriptions now, rather than hold out for a time when you may hypothetically use it.
Try to fix things yourself
A great way to make some significant savings is to try to fix anything that breaks yourself. Thanks to YouTube and the internet at large, you can now find out how to fix pretty much anything online. From leaky pipes to the zipper on your jeans, it’s always more cost-efficient to fix these things yourself rather than pay someone else to do it, or replace them entirely.
Think before you splurge
Succumbing to instant gratification is one of the biggest opponents of saving money fast. Before you make a significant expenditure, give yourself at least three to four days to think it over. This prevents the impulsive part of your brain — the part that wants to get that quick serotonin hit from a splashy new purchase — from taking over.
If you really want to test yourself, consider only making significant purchases after 30 days have passed. This is a sure-fire way to keep your impulse-buying in check. It also gives you enough time to suss out if there’s a better deal elsewhere.
Sell your unused items
If you want to start saving money for your vacation fast, it’s worth doing an audit of all your unused possessions and selling them on an online marketplace such as eBay or Nextdoor. Not only does this help declutter your home, but it can also mean earning quite a good amount of extra money which you can put towards your holiday savings goal!