How to Save Money Long Term
Whether you’re saving for a house, a car, or even just a new laptop, the hardest part is always getting started. A cash loan can help you meet your goals in the short term, but it’s best to have a plan in place for your financial future. That’s why we’ve put together some tips to show you how to save money long term.
Overview:
- Set a goal
- Create a budget
- Track your spending
- Divide your bank accounts
- Invest in quality goods
- Try the 30 day rule
- Pay off your debt
How to save money long term:
1. Set a goal
When you start saving without a set goal, it can be easy to skip payments and spend. But having a goal in mind can help you stay on track, reminding you that every time you save you’re getting closer to your goal. You might think twice before an impulsive purchase when you know it’ll put you further off track.
It doesn’t need to be a large purchase, and your goal doesn’t have to be big either. You can start with something manageable, like saving $100 a month. It might not seem like much at first, but that’ll give you over $1000 by the end of the year.
Once you reach your target, try thinking of a bigger and better goal, until eventually saving becomes a habit you can’t live without!
2. Create a budget
Once you’ve got a goal in place, the best way to help you get there is by creating a budget. By creating a budget, you’ll be giving yourself a clear picture of your income and expenses. It might reveal bills you didn’t know you had or spending habits you need to work on. Once you have it all laid out, you’ll be able to see areas you can trim down, like your grocery bills, utilities, or takeaway.
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.)
3. Track your spending
The best budget in the world is worthless if you’re not sticking to it, and the only way to know for sure is by tracking your spending. Using an app to track your spending can be a great way to visualise where your money is going and identify opportunities to cut back. While those $5 coffees might not seem like much at the time, a money tracker can show you how they add up over time. You might also find you’re spending less than you thought, and you can put a little bit more towards your savings goal.
4. Divide your bank accounts
A little bit of planning goes a long way, and splitting up your money into 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 fee free, offer high interest rates, and don’t have a card attached to them. This makes spending money from them more difficult, because it takes time to transfer money into another account. Plus, rash purchases might not seem as appealing, because you’ve limited how much money you have in your 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. Invest in quality goods
Sometimes spending more in the short term can help you save big in the long run.
Whenever you need to buy something (be it new clothes or a 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 again to replace it, whereas you could have spent $100 in the first place on a longer lasting model.
In saying this, just keep in mind that expensive doesn’t always equal best. Do your research and read product reviews before you buy anything to make sure you’re getting the best value.
6. Try the 30 day rule
You don’t have to be a minimalist to save money, but it can help to be more mindful about the things you buy. The 30 day rule is a way to stop you from making impulsive purchases, especially if you can’t afford them. Before you make any unplanned purchase, wait 30 days and put that money aside in your savings account.
If you don’t miss the money, and you still want the item after 30 days, you buy it! It’s an easy way to help you stay on track, curbing your impulses to buy things you don’t need or can’t afford.If you get to the end of 30 days and decide you don’t need it after all, consider leaving that extra money in your savings account.
7. Pay off your debt
One of the best ways to save money long term is to pay off your debts. Whether you’ve got credit card debt or a small personal loan, the longer you wait to pay it off, the more interest you’ll accrue in the long-term. Paying your debts off sooner can help you cut down on those interest costs and save.
If you’re finding it hard to keep track of your debts, you might want to consider a debt consolidation loan. These combine all your debts into one payment, simplifying your budget and helping you avoid multiple late 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. Maybe the Christmas period hit you harder than you thought, or you’re looking for some extra back to school funds. Either way, one of our easy secured loans can help. 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.
