5 Smart Ways to Save Money & Reach Your Goals

1. Create a budget

The first rule is you need to have a well-thought-out, realistic budget in place for your income. This budget needs to consider all of the income that you have. It can be from different streams of income or from your one active income from your main job.

Wherever that money comes from it needs to be tracked so you can take into account everything that goes out.

Every single thing needs to be included in your budget. You need to make note of every direct debit, every payment, and every commitment that you have. Eating out, socializing, buying clothes, whatever it is that you spend money on, needs to be built into your budget.

Otherwise, your budget will not be realistic and well thought out, and you won't be in a position to easily maintain it. It becomes effortless to stay safely within your budget if it is carefully planned. It will enable you to meet your financial goals and your saving targets.

A proper, well-thought-out budget cannot be underestimated and is not just for people who are struggling with money. I noticed that as my earnings grew, I started to rely less on a budget. I started spending more and more, only to get to the end of the month and be no better off than I was. I spent all the extra money that I was earning.

I was only able to save again when I got my life back in gear, got my finances sorted again, and put a budget into place again. The budget had grown and it had allowed me additional money for different things, but only when I got back on track with my budget did my savings start to grow again. My investments started to grow because I had actively budgeted what I could spend,

2. Set yearly financial goals

When you set yourself a yearly financial goal, that allows you to break down what you need to put away and save towards that goal on a monthly basis. A year may sound a bit abstract, but if you don't plan, you will not know what you need to put away on a monthly basis to hit that target. Knowing your goal with provide you with exact numbers.

Your goals might be to save enough for Christmas gifts, birthday parties, or vacations. Whatever it is you spend your money on, figure out how much you will need and budget accordingly.

3. Separate accounts

I have separate accounts for everything. I have a separate spending account for being frivolous. I have a holiday account. I have an emergency fund. I have a bills account. I have an everyday spending money account. I have investment accounts. I have investment accounts for my children. I have savings accounts. You name it. I have an account for it.

When I work out my budget and I know what I have for spending, for bills, for saving, for holidays, for car funds, off it goes into its own account. I can't overspend. I will only use the account for its designated purpose.

A lot of people refer to these as sinking funds. When I have different accounts for specific goals, it allows me to focus more clearly on that goal. It helps me keep that money in the account. It prevents me from spending money that was meant to be for something else.

4. Automated payments

Automate your bill payments for when you get paid. As soon as you get your paycheck, have your payments set up to come out and go into those different accounts. That way it takes away the option to spend it. The money is out of the way and you won’t be tempted.

5. Use credit cards properly

If you can use credit cards properly and stop using debit cards, you will be in a better position to manage your money. You can track your spending easily. you can also save yourself cash back, points, air miles, or any of the rewards that come with using credit cards.

Credit cards allow me to track my spending very easily. It also means there are things I no longer have to pay for out of my income. The rewards that I earn from the credit card are covering them.

Using that credit card properly is allowing me to not only manage my money but also get the benefits back from using credit cards. One disclaimer I should make is you should only use credit cards if you can control them. Do not use credit cards if you're going to use them to run up debt and buy things that you actually can't afford.

Only use credit cards if you know that you are committed enough to manage them. When they are used properly, credit cards can be a fantastic way to help you save. They can help you manage your money and reach your saving target more quickly.

Ways to save money

When these rules are applied properly, they really work. They certainly have helped me to meet my savings targets and my financial goals. I set financial goals every single year and I still do it the same way.

I think financial planning and financial goal setting is key. When you put these rules in place, you set yourself up to succeed. I hope you found these rules and tips to be helpful. Leave me a comment and let me know what you think.