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How to Save Money: Simple Tips to Get Started 

Introduction

It’s important to save money to feel safe and stable financially. Whether you need an emergency fund, want to make a big purchase, or plan for your future, saving money is necessary. This guide gives you easy tips and strategies to help you save money well.

Understanding Your Finances

How to Create a Budget

Budgeting is the first step to taking control of your money, and building your savings. Here are ways to help you come up with a good budget:

  1. Track Your Income and Expenses: Write down all the money you, earn and all the money you spend each month.
  2. Categorize Expenses: Group your expenses into categories like rent, food, transportation, and entertainment.
  3. Set Spending Limits: Decide how much you can spend on each category, and stay within that limit.
  4. Adjust as Needed: Review your budget from time to time, and change what you have to depending on your situation and goals.

Examples of Effective Budgets

  1. Basic Budget

A basic budget helps you divide your monthly income between necessary costs, savings, and spending on things you want. If you’re new to planning, this method is great because it’s simple and easy to follow.

Example:

Monthly Income: ₱50,000

  • Rent: ₱15,000 
  • Utilities: ₱3,000
  • Groceries: ₱10,000 
  • Transportation: ₱5,000
  • Entertainment: ₱2,000 – Leisure activities like dining out, movies, etc.
  • Savings: ₱10,000
  • Miscellaneous: ₱5,000 – Other expenses like clothing, personal care, etc.
  • Total: ₱50,000

Note: The amount shown above is only meant to be an example.

2. 50/30/20 Budget

The 50/30/20 budget splits your income into three parts: savings, needs, and wants. This plan makes sure that you can pay for your necessary costs, enjoy some extra spending, and still save a big chunk of your income.

Example:

Monthly Income: ₱50,000

  • Needs (50%): ₱25,000
    • Rent: ₱15,000
    • Utilities: ₱3,000
    • Groceries: ₱7,000
  • Wants (30%): ₱15,000
    • Entertainment: ₱2,000
    • Dining Out: ₱5,000
    • Shopping and Leisure: ₱8,000
  • Savings (20%): ₱10,000
    • Emergency Fund: ₱5,000
    • Retirement Savings: ₱5,000

Note: The amount shown above is only meant to be an example.

Top Saving Strategies

  1. 30-Day Rule

This rule says that you should wait 30 days before spending. This keeps you from getting something without thinking, and it gives you time to decide if you really need it.

  1. 50/30/20 Rule

This budgeting method divides your money into three categories:

– 50% for needs

– 30% for wants

– 20% for savings

  1. 10% Saving Rule

Every month, save at least 10% of your income. This easy rule can help you save a lot of money over time.

Practical Tips to Save Money

Reducing Daily Expenses

1. Make Coffee at Home: Instead of buying coffee every day, you can make your own to save money.

2. Pack Lunch: Instead of going out to eat, make food at home.

Cutting Down on Utility Bills

1. Use Energy-Efficient Appliances: Using energy-saving devices will help you use less power.

2. Switch Off Lights and Electric Appliances: Turn off things when you’re not using them to save power.

Smart Shopping Tips

1. Buy in Bulk: Buy things that don’t go bad quickly in large quantities.

2. Use Shopping Lists: Make and follow a shopping list to avoid buying things you don’t need.

Using Discounts and Coupons

1. Find Coupons: Collect coupons, and use them to save some money.

2. Shop During Sales: Maximize seasonal sales and discounts.

Saving on Big Expenses

Tips for Saving on Housing

1. Rent Instead of Buy: If buying a house is too expensive, you might want to think about renting instead.

2. Roommates: You can look for roommates to share living costs, and split the rent and some of the bills.

Saving on Transportation

1. Public Transport: Use public transportation to save money on gas, parking, and car maintenance.

2. Carpool: Consider sharing rides with colleagues or friends to split the cost of gas and parking.

Reducing Healthcare Costs

1. Preventive Care: Get regular check-ups to keep yourself from getting expensive health problems.

2. Generic Medications: Try generic drugs over branded medication.

Building a Savings Plan

  1. Setting Up a Savings Account: Create a high-yield savings account to get more money back in interest.
  2. Automating Your Savings: To make sure you save regularly, you can set up automatic transfers to your savings account.
  3. Creating an Emergency Fund: Try to save enough money for three to six months of living costs in case of an emergency.

Common Mistakes to Avoid

  1. Overspending on Non-Essentials: Don’t impulsively spend money on things you don’t need. If you must spend, make sure to stay within your budget or limit.
  2. Not Having a Budget: If you don’t have a budget, you’ll lose track of your spending, and miss chances to save money.
  3. Failing to Track Expenses: Look over your spending every now and then to find out where you can save money.

Other Options

While saving money is important, we understand that some may find it difficult due to the growing cost of living. If ever you’ll need an extra hand or financial assistance, borrowing money from a legit and formal lender may be an option.

Taking out a loan to relieve a financial burden during crises, unanticipated costs, or to make payments easier on your wallet is not a bad thing. In fact, a multi-purpose personal loan, for example, helps you manage your cash flow since it enables you to pay in installments instead of spending a big amount of money at once. 

Before you borrow money, make sure you fully understand all of your loan’s terms and conditions, such as the interest rates and due dates. Making sure that you can easily pay your loan back on time before submitting a loan application is key to helping you overcome money issues.

If you want to protect your rights as a borrower, and avoid paying too much in interest, you should only borrow money from legal lenders like SB Finance as they are regulated by the Securities and Exchange Commission, and supervised by the Bangko Sentral ng Pilipinas.

Conclusion

Saving money is a big aspect of being financially responsible and stable. Having a solid financial foundation can be built by knowing your money, saving wisely, and staying away from common mistakes. Starting today, apply these tips to get you started in building a better financial future.

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