Learn how to review your expenses and start saving effectively. Create a budget, cut out unnecessary expenses, and automate your savings for financial success.Sometimes life throws up difficulties, including financial ones. We talked with financial consultant Ekaterina Shepeta about how to start saving money and getting your finances in order, but at the same time not denying yourself what is really important.
Start keeping a spending diary
This way you will understand what exactly the money is spent on. Without this information, it will be impossible to qualitatively optimize expenses.
You can study your expenses using analytics from a banking application, use special accounting applications , or write down expenses in a notebook the old-fashioned way. The main thing is that you understand how much money you spend and where exactly it goes. A spending diary will help you understand how and where you can save.
Give up the unnecessary
You lose money on ineffective spending because it does not bring you any benefit or joy. You can track it in your diary. Extra spending can be, for example:
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Subscriptions to services you haven’t used for a long time. Unsubscribe from them as soon as possible.
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Outdated or unsuitable mobile phone and Internet tariffs. Study the offers of different operators and try to choose the most advantageous tariff that covers your needs.
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Expensive loans with rates above market rates. If you don’t have extra money, it’s better to stop giving it to the bank. Try to close such loans as soon as possible.
Don’t miss out on additional opportunities to earn money
There are small ways to increase your income that won’t require too much time or effort:
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Get a cashback card. All major banks have them. My experience shows that this allows you to get back an average of 2% of your expenses.
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Apply for tax deductions. If you are employed, you have the opportunity to return part of the personal income tax paid. You can return 13% of the amount of expenses for treatment, education, and the purchase of real estate. You can also return 13% of the invested amounts.
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Sell unnecessary things. Kill two birds with one stone – free up space and get extra money.
Make a budget
It doesn’t have to be very detailed. You can just outline the general outline: mandatory expenses, optional expenses, savings. You can start by planning your expenses for the week ahead. But I recommend starting from how often you receive income. If your salary comes once a month, make a budget for the month ahead.
The very fact of having a budget will help you spend less. It’s like going to the store with a list – the likelihood of buying unnecessary things decreases several time.
What to do if you need to urgently cut costs
The above tips are systemic measures that will help improve your finances overall. It takes time to feel their effect. But there are situations when you need to take quick anti-crisis measures.
1. Take advantage of promotions and discounts in stores. You can follow great deals, for example, through channels in Telegram .
2. Give preference to large economical packages. This is effective only for products with a long shelf life that you use constantly. For example, it is convenient to buy household chemicals in five-liter bottles.
3. Plan your menu to avoid throwing away spoiled food.
4. Don’t be afraid to buy used items. You can often find almost new items for up to 50% off the store price.
5. Buy or rent large items to share with friends.
Don’t forget that saving shouldn’t affect those categories that allow you to support yourself in resources. I think that you can’t save on your health and education – on everything that will help you get out of the crisis.
Savings are limited: we cannot spend less than our minimum. But income has no limit, except what we set for ourselves. Remember this and direct your efforts to income growth.