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Friday, April 2, 2010

How to spend less and save more

We tend to spend more when we have money. If we are not careful, we will easily over spend. Over spending often leads us to debts. In addition, we will be in possession of things that are unnecessary and less meaningful.

We need money to sustain our living. Therefore, money is important. It is important to set aside money for emergency and for the accomplishment of major financial decision like buying a house, kids education, retirement, etc.

How to slash spending and maximize saving?

1. Create a cost saving budget

Budget will keep us from spending lavishly. If we spend according to our budget, we will not over spend and we may even be able to squeeze some money out of our budget for saving. Therefore it is important to budget.  We can create a budget by bringing together all our monthly income after taxes and tracking all our expenses. Our budget has to be flexible and varied with our income level. However, to live on a budget may not be easy at first, it requires a lot of discipline and persistent. Start by taking a baby step and slowly settling into  living on budget.

2. Use cash instead of credit cards

Credit cards bring convenience into our lives. With credit cards we can buy things easily even though we are not carrying any cash. We will not think much before we buy due to the convenience of using credit cards. We will easily get ourselves into over spending and debts. Therefore, it is wise to limit the use of credit cards and always spend on cash. We can reduce the number of credit cards by keeping only one or two credit cards for emergency.

3. Look for ways to save money daily

We spend every day in order to sustain our living, therefore it is important to look into our daily lives and find ways to save money.

Below are some areas and ways that we can save money daily:

a) Food

We need food for energy and to sustain our lives. Food makes up a large part of our grocery bills; therefore, we have to be careful with food. We tend to buy more when we are hungry. Therefore, we should not go shopping for our grocery with empty stomach. Always make a list of grocery that we have to buy, as this will prevent us from buying too much unnecessary stuff. Below are some ways to save on food:
-Try coupon clipping;

-Go to the supermarket to shop only on discount days for example in Hong Kong, many supermarkets offer discount on Friday;

-Buy food and cook food that is on sale;

-Buy food in bulk when there are cheap sales;

-Instead of buying fast food, try to make cost saving dinner from scratch at home;

-Buy cheaper brand food for example instead of buying Dreyer or Häagen-Dazs ice cream buy Nestle ice cream;

-Bring brown bag to the office for lunch;

-Be creative with left over and eat left over;

-Grown our own vegetables if we have garden;

-Cut on junk food
b) Utilities bills

There are many ways that we can save on our utilities bills:

- Use fan instead of air conditioner during summer time;
- Use energy saving light bulbs to light our house;
- Use solar to generate electricity;
- Switch off computer and electrical appliances when they are not in used;
- Have shower instead of bath;
- Turn off tap when brushing teeth;
- Take less bath and shower;
-Run the washing machine only when the laundry is full.

c) Clothing

Clothing can be a large part of spending.  Therefore, we should look for ways to save:

- Embrace” hand me down” passing on old cloth from older kids to younger kids;
- Try to shop at second hand clothing shop;
- Shop out of the season;
- Shop when it is on sales;
- Buy cloth that we can mix and match;
- Learn sewing and sew own cloth;
- Buy classic cloth rather than trendy cloth;

d) Transportation

For those of us who need to travel to work every day, transportation makes up a large part of our daily expenses. We can save some money if we are wise in choosing the mode of transportation every day:

- Use public transport instead of driving own car. This will save us on gasoline and parking fee;
-Practise car-pooling;
-Walk instead of driving to place that is within walking distance
-Travel with public transport at non peak hour to save ticket fares

5. Entertainment

We often reward ourselves after a long day work; therefore, entertainment can be a large part of our daily expenses. With the advance of technology, we can now enjoy cheap mode of entertainment. If we know how to make choices, we will be able to choose the entertainment that is cost saving.

- Read free on line materials such as newspaper, blogs, etc;
- Watch free on line movies;
- Listen to free online music;
- Look for free concert in town;
- Go to libraries instead of buying book from bookstores;
- Go hiking or have a picnic in the park;
- Walk in the park or along the beach;
-Have a restaurant night at home instead of eating out;
-Eat out once a while on non holiday

 6. Traveling

Most of us love traveling because traveling enables us to broaden our horizon. There are several ways that we can have an enjoyable and cost saving holiday:
- Travel off peak season;
- Use cheep airline such as Air Asia, Cebu Pacific, just to name a few;
-Join package tour;

If we use money wisely, we will spend less and save more and this will free us from debts. We will have more happiness, less stress and worries if we are debt free.

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