Cutting back money is a huge problem for most people, simply because we love spending every penny we earn. And this is why today, we will be taking a look at five practical money hacks that will allow you to cut back tons of money every month. And without any further delays, let’s get started!
1. Know Your Reason Behind the Cutting backs
So the first idea is that you should know precisely why you want to cut back in the first place. A lot of people give up and stop cutting back because they don’t see precisely why they are protecting. Thus, your goal shouldn’t be to cut back for a great wedding or a brand new car because once you get that car, you will go back to your previous position where you came from and continue facing those financial challenges. So instead of that, aim at one thing or two, let financial freedom be your sole driving force.
2. Always Pay Yourself First
Before you even think of spending a single penny out of your income, always endeavour to put aside a percentage of it into your cutting back account (if you don’t have one, then make one). And once you deposit the money into such an account, you are not permitted to spend this money under any circumstances, no matter what you are going through.
Now, this is because whatever money that goes into the account should never be spent anywhere, instead, be invested in something that will be financially productive. I’d like you to look at it as being a part of your taxes, something that you have to pay whether you like it or not.
3. Spot Out Your Expenses
If you’ve never been a consistent saver, then it might be difficult to start cutting back, especially during the first couple of month when you are most likely going to feeling like your cutting backs aren’t growing as fast as you would want them to. Yes, you’re right, they aren’t growing as they should, and that’s because you haven’t taken the time to know your expenses.
So, what do you have to do in order to know your expenses? Spend at least the next 30 days writing down every transaction you make, so that by the end of the month, you have will a detailed understanding of how exactly you spend your money, and then deduct expenses in those areas that don’t have a significant value to your life.
For instance, instead of buying a coffee every morning, you can make that yourself and cut back somewhere around 50 to 70 bucks a month. Or, instead of driving, use public transport to get to your job if it’s more affordable. Do this, and you might just be cutting back another 50 or 60 bucks.
Procrastination is terrible but not in this case. Usually, we get excited when we want to buy something new right away, even if it’s something we don’t need. But over time, that excitement often goes away. It’s like when you buy that new phone; for the first couple of days, you might still be excited about it, but then, you know what happens, it just becomes normal eventually.
So why not get in the habit of waiting to buy things, especially those expensive ones? After all, you will still end up buying them anyways, but not just immediately. Procrastinating your purchases, will cause you to either add the items to your wish list or cart, thus giving you the time to have a rational rethink of the spending you’re about to make.
5. Use Cash Always
Whenever you buy something, always make sure to use some money instead of a debit card, whether you are ordering a food in the restaurant or getting something from groceries. Handing over a 20-dollar bill is a lot harder than just swiping your credit card, only because when you swipe your card, it feels like you are spending a lot less. But that’s often not true; the reverse is always the case.
Thus, to avoid this, always ensure that you pay for things using cash as over time, you will not only become a more conscious spender but will be able to buy more of what you need and less of what you want.
In essence, if you want to cut back money, then you have to apply these practical money-cutting back hacks. They are termed as being “practical” because, failure to use them in your day to day financial dealings, can leave you not only short of cash but bankrupt. So, the choice is all yours to make!