How to Save Money Long Term
Whether you’re saving for a house, a car or even just a new laptop, the hardest part about saving money is getting started and then staying on track. That’s why we’ve put together 6 tips to show you how to save money long term. Keep reading to learn more (including how a cash loan could help you reach your savings goal faster).
Overview:
- Create a budget
- Track your spending
- Invest in quality goods
- Divide your bank accounts
- Try the 30 day rule
- Pay off your debt
How to save money long term: 6 tips
1. Create a budget
When you’re learning how to save money long term, the very first thing you need to do is create a budget. By creating a budget, you’ll be able to see your income vs your expenses and what a realistic savings goal looks like. It might even reveal some bills you didn’t realise you had (like subscriptions) or spending habits you need to work on (like impulse buying).
What’s the 50-30-20 budget rule?
This rule basically outlines how your money should be distributed.
- 50% of your income should go to your needs (such as rent, electricity bills etc.)
- 20% should be split up between your savings and debt repayments (like paying off a small loan)
- 30% should go to your wants and entertainment (like going out with friends, buying clothes etc.)
2. Track your spending
Similar to creating a budget, tracking your spending on an app can be a great way to see where your money is actually going every day. While your daily $5 coffee doesn’t seem like much at the time, seeing how much it can add up to every week/month/year can be a real eye opener.
3. Invest in quality goods
While telling you to spend more money when you’re figuring out how to save money long term seems counterintuitive, hear us out.
Whenever you need to buy something (be it a new car, washing machine or vacuum cleaner), opting for the cheapest option can be very tempting. But, even though it can save you money in the short term, it could actually wind up costing you much more than you bargained for. Say you spend $50 on a vacuum cleaner, but it breaks down in a couple of months. This means you need to fork out another $50+ to replace it, whereas you could have spent $100 in the first place on a much better model.
In saying this, just keep in mind that expensive doesn’t always equal best. So, do your research and read product reviews before you buy anything.
4. Divide your bank accounts
Managing bank accounts is never a fun or easy task. But with a little bit of foresight, opening the right accounts can help get you on track for saving.
Some banks offer online-only accounts that are perfect for saving. They are usually free from fees, offer high interest rates and they don’t have a card attached to them. This makes spending money from these online accounts more difficult, because it takes time to actively transfer money from one to another. Plus, rash purchases might not seem as attractive as they once were, because you’ve limited how much money you have in your transactional/spending account. This means you only have a certain amount of money on a night out, and there’s a much better chance you won’t be blowing the lot at the bar.
Having this other account is also an excellent reminder of the need to save. There may even be a little bit of guilt when you see your savings account start to decrease, which may very well work in your favour!
5. Try the 30 day rule
What’s the 30 day rule you ask? Basically, before you make any unplanned purchase, you wait 30 days before buying it and put that money in your savings account instead. If you still want the item after 30 days, you buy it! The rule is meant to curb your impulse buying and make sure you’re only buying things you really need/want.
6. Pay off your debt
The best way to save money long term is to pay off your debts. Whether you’ve got credit card debt or a $5000 loan, the longer you wait to pay it off, the higher your interest payments go – which means you’re paying more in the long-term. So be sure to factor any and all debts into your budget. You might also want to consider a debt consolidation loan to reduce any fees.
Looking to invest in something in the near future?
Saving over long periods of time is hard work, and the team at Swoosh know that even with saving, the unexpected is always bound to happen. If you’re looking for funds up to $5,000, consider one of our easy secured loans. Scheduled repayments and a streamlined approval process mean that repayments are easily factored into your lifestyle, leaving you headache free. Get in touch to find out more.
