It can be discouraging to see a near-empty bank account or a pile of debt staring back at you when you’re considering investments you want to make. Fortunately, there are a number of simple ways to help you save money to start investing.
1. Set aside 10% of your paycheck for investments.
Although this means you’d have to cut out luxury expenses, putting aside 10% of your paycheck every month can help you gradually save for investments. If you receive payment through direct deposit, transfer 10% of the money to an investments or savings account. By putting 10% of your income to another account, you won’t be worried about spending any of your investment funds.
2. Save $5 a day each month to pay off your credit card debts.
Most people have the habit of paying their monthly credit card bill at the last minute. Unfortunately, by doing so, it can cause them to be frantic and scramble for cash to avoid paying late fees. To cure the last-minute disease, save $5 every day, every month before your monthly bill comes in. You can save the $5 in cash or put the money in a separate checking account for credit card payments. This method usually works for 1-3 credit cards you’re paying off, but you can increase the $5 to $10 if you have more credit cards to pay off. Without credit card debt, you can comfortably save for your investments.
3. Buy generic or store-brand products.
Switch to generic products and foods whenever you can while grocery shopping. You can save a few bucks by switching and get the same results as brand name products. If you need help deciding on buying generic foods and items, look through your home and see what you can replace with a generic product. Note them on a list for your next grocery shopping trip.
4. Do it yourself.
From minor home repairs to preparing home-cooked meals, you can save money by doing things yourself. Hiring a professional to do your gardening or ordering Chinese take-out can be costly when you can do what they do yourself. Look up recipes for your favorite restaurant meals and make them yourself. Search for ways to repair that hole in your wall or paint your home yourself. Through DIY, you’ll be able to save money and gain experience through doing things yourself.
5. Pay the bills on time.
Avoid your late fees and pay all your bills on time, even if it’s on the due date. When you pay after the due date, you’ll be paying more than you need to with the added late fees. Plus, paying late fees is avoidable if you pay your bills on time, so don’t dig a deeper hole in your wallet by paying them. If you’re struggling to save money for your bills, then save a certain amount of money for each bill every month instead of rushing at the last minute to pay for them.
6. Save your change.
Putting away your extra cash is still one of the easiest and most effective ways to accrue seed money! Save every penny (literally) you obtain and watch your piggybank slowly grow into hundreds of dollars. Save every penny (literally) you obtain and watch your piggybank slowly grow into hundreds of dollars. Although saving up your coins may not look like a lot, you’ll be surprised on how much you’ll receive after exchanging it for cash. Every six months, exchange your coins for cash to put it aside for your investments.
7. Clip coupons.
Before going out to grocery shop, find coupons in weekly advertisements, newspapers, junk mail, other paper sources and online for foods and other products. To further save on your grocery shopping, find both store and manufacturer coupons to use on your purchases. By using coupons, you’re able to save more money on necessities to put towards your investments.
8. Challenge yourself to find cheaper entertainment alternatives.
There’s no need to spend lots of money to have fun! Instead of going to the theater whenever a new movie comes out, wait until it comes out on DVD and rent it instead. Save space and money on book purchases, and borrow them from the library. Don’t eat out at a restaurant – make homemade meals and go on a picnic. Go bike riding instead of using a gym membership to work out. Look at every activity you do that costs money, and ask yourself if you can do something similar that costs less or nothing at all.
Remember to set goals and learn about which investments you want to make to figure out how much you need. However, you don’t always need a truckload of money for future investments. By learning how to spend and save your money wisely, you can invest sooner and watch your cash flow increase overtime.