Ever thought of giving frugal life a shot?
Well, in simple words, being frugal simply means spending less and saving more! It is about finding that financial freedom that you’ve always wished for.
While you juggle every day to get hold of work life, personal life, and finances in your 20’s, you might often look for tips to maximize your savings. We know that managing your finances come as little overwhelming, especially when you are young.
But, the sooner you start making a financial plan, the more time you will have to create a better future.
If you are struggling to battle that spending habit, here are the top tips to whip your savings into shape.
First things first- Don’t fall for the ‘YOLO’ mentality
This is something that needs to be addressed among every millennial.
So, you only live once, right? Why not live it up to the fullest (Thoughts of every 20-something these days!)
Once we get a real job, we are ready to take on the world because we finally start to earn something.
You feel free and overcome the fear of missing out with a potential of spending out of limits. However, you need to find a between a proper balance between spending and saving.
No, you don’t need to stress about it, instead, start budgeting a little beforehand. The 50-30-20 rule can be a good starting point for you, 50% of your income should be used to pay out bills and your rent, 30% of your salary should be kept for personal expenditure and remaining 20% is meant for you to save.
Live below your means
Living below your means is great to start saving up. This is where the real magic happens because it is about spending less than you make.
Almost everyone in their 20’s looks up to their friends in order to see how they should be spending their money. And, this is where the major pitfall comes up!
Don’t just keep on spending aimlessly, instead spend wisely. Sacrifice your lavish spending habits or try finding a job that makes enough to cover your spending habits.
Rent rather than buying
Your 20’s is the time when you start thinking about setting up a base. When it comes to moving house, the age-old question pops up: is it better to rent a home or is it cost-effective to purchase one?
Well, this topic has undeniably always sparked a huge debate.
Everyone assumes that buying is a better investment, but if you calculate the interest you pay on mortgage along with the insurance and maintenance expenses, buying is more costly than renting.
This phenomenon of buying isn’t just restricted to a house but also at micro levels, from furnishing your home to buying your dream car/bike. It’s important to understand life isn’t as short as people make it sound. If you are in your early 20s what you need to look at is you’ve easily got 4 times more the time you’ve been alive. Spend on things that matter and do away with the little intricacies that can be your shortcoming.
Consider your long-term goals and gives a head up to renting so that you can be free from all those heavy investments and other overhead expenses.
Stop those online impulse purchases
Everyone is tempted by that “End of the year” and “End of reason sale.” But, this is one of the worst things you can do while you are trying to save up for your expenses.
Marketers encourage the consumers to make the impulse purchases. But you need to resist the feeling of “wanting” everything and stop buying things on the sale.
Yes, we know there is a different thrill in finding the deal, but in the end, those clothing pieces simply sit it in your closet.
Get to know the library
You know like Arthur said—having fun is not hard when you have got a library card.
Make use of a library card to cut all the entertainment costs.
There are many libraries that allow you to check out e-books, DVD’s, mobile games, and more. So, you can simply go there – download the books, stream the videos, and get a heavy dose of entertainment without spending anything extra.
Know the difference between investing and spending
Investing and spending seem like the same thing, but they’re completely different.
Investing is spending the cash in exchange for the tangible assets, while spending is the outlay of cash for something that is likely to depreciate in value.
So, maximizing does not mean that you have to choose to invest overspending, but it requires you to understand the difference and the ways you use to put your income to work.
Show up your creativity
Presents can cost you a lot of money. When it comes to gifting your friends on special occasions – don’t lose your head and start buying anything. Instead, make them something!
We are not saying to transform you into Pablo Picasso, but make them a handmade card, gift or just simply bake a batch of cookies for them.
Your loved ones will always cherish the gift, and no one has to know how much money you saved on it. Win-win!
Create a minimalist wardrobe
Creating a minimal wardrobe does not mean to stock up on two or three pieces, instead just purchase something that is classic, timeless, versatile, and are of good quality.
It is a great way to maximize the savings because you won’t be impulse spending then. Also, having a minimalist wardrobe will help you mix and match the items more easily.
Pro tip: Avoid buying trendy pieces as they will last once a season and will then go out of the style quickly.
Make happy hours your best friend
Who said that you always have to go to the trendiest bars to grab just a pint or drink?
If you are trying to increase your savings, avoid going to the trendy bars. Instead, research for the best cafes, restaurants, bars and find out who has the best and affordable happy hours.
Track your expenses
No, you don’t have to create a massive excel spreadsheet with thousands of categories to track your expenses.
Instead, there are a plethora of budgeting applications, which are free on your smartphones and can help you manage your finances. Link all your bank accounts there and track if you are overspending in any of the areas.
Keeping a regular check will bring your extra expenses into consideration and will also help you to save more on them.
Maximizing your savings in your 20’s is all about better money management, bargained shopping, and showing a bit of creativity.
A couple of pennies saved here, and a few ones invested there doesn’t give you a life of deprivation instead, opens up a lot of possibilities for you.
So, what are you waiting for?
Take heart these tips and get ready to dive into the frugal life.
Live the frugal way, live the smarter way. Visit our online store, the one-stop solution for all your renting needs. Choose from our wide selection of furniture, home appliances, fitness equipment and more on rent.