How To Save Money

Money saving tips for all income brackets

There's no magic formula to saving money -- all it takes is some discipline and prioritizing. If you're constantly finding yourself struggling to make ends meet and you're wondering how to save money for the future, the best place to start is by acknowledging a deceptively simple fact: if you're having a hard time saving money, your only choices are to cut back on your expenses or increase your income.

This simple advice on saving money applies to people of all income levels, whether you make $10,000 a year or $100,000. It is one of many sensible money saving tips that you can use no matter how much you make.

More Money Saving Advice

Most financial planners and personal finance professionals stress one mantra above all others: pay yourself first. On payday, the first thing you should do is take 10 percent of the money and put it in a savings account. Use what's left over for your living expenses.

As for the principle that you need to decrease expenditures or increase your income, it's most effective if you do a combination of both. To decrease expenditures, you need to assess how much money you're spending each month, and on what. List all your expenses, including fixed expenses (mortgage/rent, car payments, car insurance) and necessary but unfixed expenses (utility bills, groceries). Then, list your unnecessary expenses (entertainment, luxuries, dining out). Look for ways to cut back on your unfixed and unnecessary expenses. It also pays to know how to live debt free, as you won't be able to save much if you're constantly having to pacify your creditors. Reducing and eliminating debt is an essential first step towards saving more money.

Increasing your income might mean getting a part-time job, starting your own business or finding safe but profitable investments. If you already have a significant amount of money saved, you can put it to work for you to generate even more income. Low-risk investments with predictable rates of return include government bonds, guaranteed investment certificates (GICs), money market funds and certain mutual funds. Talk to a bank representative or financial advisor for more information.

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