Why Saving Money On Daily Expenses Is The Best Way To Prepare For Retirement
We often hear our elders declare, “A penny saved is a penny earned.”
There is true wisdom hidden in this old adage. Money is the driving force to satisfy material needs, small or big. With the growing standards of living and several financial commitments to deal with daily with limited means of income, it seems a far-fetched goal to save for retirement. Knowing how much you can invest or spend somewhere, is important. Not taking care of your expenditures is among the first reasons you don’t meet your saving goals. It’s also why you need to learn to keep track of your finances.
Not Rocket Science
You don’t have to be an accounting expert or a finance guru to plan your personal finances. The savings made today will come in handy in the future, and their worth will be realized in times of need. Sometimes, curbing our immediate compulsive shopping desires instead of planning for days when the only source of income will be our savings from our hay days can be both satisfying and fruitful.
Putting some of our childhood habits to use now is a good start. Remember when those cute piggy banks hidden under a stack of clothes in your wardrobe was the best means to buy a toy refused by parents or get an ice-cream during winters from your favorite creamery?
Baby steps taken effortlessly can lead to a bigger bank balance in the future. We provide you here with some ideas which could be inculcated in your lives to helyou save each additional penny for your retirement needs.
Record and Review
Put that smartphone gazing at you right now to best use. A dearth of applications is available these days to record your daily expenditures and set limits to the amount spent. The application will alert you if you spend more than the planned limit daily. This could act as a check and control your urge to indulge in financial temptations. A few examples of such applications are:
- Expensify: This app directly imports credit card payment and expense receipts or could be scanned through mobile phones, recording and generating reports communicated through email. You can use it on both iOS, and Android.
- Receipts by Wave: An iOS and Android-friendly application that allows you to scan your receipts on to the app. The information is saved in the cloud sparing storage issues on your device. It helps you categorize your receipts under different headings to ease accessibility.
Microsoft Excel has introduced in-built templates to plan your daily, monthly and weekly budgets. It shares any deviations from the standard amount in graphic form. You can also track down trends over several days or weeks within a month or year.
Often people get into the habit of recording but never go back to review their expenses. There is no point in recording if you do not review your receipts and payments from time to time and understand how and where you can save money. Fix a weekly or monthly day and time to review your budgets and make amends.
Be a Smart Consumer
Being an informed buyer and acting at the right time can save you loads of dollars.
- Make your visits to the grocery scarce. Instead of visiting the grocery store twice a week, list items required for the whole week or month and cut-down additional costs of commuting and save by bulk-buying.
- Comparing the costs of cooking vs. eating out is another way you could save.
- Plan your holidays in advance to avail yourself of the cheapest air tickets and hotel accommodations.
- Keep an eye on special offers and sales of your daily need items and get them at the best prices.
- Put-off buying that beautiful dress you saw in the mall or that pair of shoes you loved until you actually need it or it goes on sale.
- Use public transport or opt to carpool while commuting between work and home, if possible. This may save you a great deal on fuel expenses.
Plan your Finances
Not only saving money but also avoiding unnecessary financial liabilities is a way towards a more secure retirement. Do not seek loans unless actually needed and if you do, make sure to pay them back promptly. Do not let your credit card bills or insurance premiums pile up. These measures will not only help you in the present but also keep you at ease in the future.
When making a job move, spare an additional minute to review the retirement benefits provided by your prospective employers. A company with a good retirement policy can act as a helping hand.
Never underestimate every penny you save because little drops of water together form the mighty ocean.