*This blog post is my personal opinion only and may contain affiliate/referral links.
Earning more does not always equate to saving more. This is why saving rate is different for everybody. One may be a $10K monthly earner but if his saving rate is 10% only, then he is in equal footing with a $5K monthly with a 20% saving rate.
It’s the end of the month. You have been paid twice already and you are at an ATM only to find out your balance is low. Sometimes, taking a mental note of our bank savings is so passive we forget the real amount we have on our account. Untracked spending can balloon and really blindside us if no action is taken.
Make it a Habit to Track your Monthly Spending
Having a clear visual of where your hard-earned money goes is a good indication that you want to track your spending and more importantly to improve your finance. It is also a good basis for trimming unnecessary expenses for next month. Are you overpaying for that cable subscription? How many times did you pump gas this month? This are just some of the question that can be answered well if you have an expense comparison from month to month.
Finding an expense tracker is easy now with more options out there. Some prefer a printable tracker that they can carry and write on, some lets a budget app do the work, and some are still keen with an Excel spreadsheet.
Live Below your Means
This is a month-long lifestyle choice that compounds big time on your wallet. It will definitely boost your savings rate if you keep your monthly budget in check even if your income increases. Consider how much you can add to your saving rate if you have the same amount of monthly entertainment expense after your pay raise last month?
Increasing your savings to $100 a month and then investing that on an index fund that earn 7% return on a year is an extra $1284 on your pocket, just saying.
End of the Month Decluttering
Believe it or not, some of your stuffs can have a second life as donated or flipped items. Some of the products that you bought earlier this month may also qualify for a return, as these products usually have a 30 day return policy. Getting rid of some of this unwanted stuffs will free some of your expenses and add to your saving rate.
It’s important to know that it’s not just physical stuffs that are being cleared on your home, but it is also freeing a lot of mental space for your minimalistic organized mind.
Thank you for reading.