Saving money is a necessary habit that every individual should have, especially for households. Because households have many members, expenses will be more, and necessary expenses for the future will also increase. Saving money as early as possible will help you be more prepared for the future, as well as urgent situations. So do you know how to save money effectively for your family?
Responding to World Savings Day, today TYM will share 8 EFFECTIVE WAYS TO SAVE MONEY FOR A FAMILY. TYM hopes that its customers will share, discuss, and apply these savings methods together with family members and relatives to increase family’s asset!
1. You should have a specific spending plan
Creating a specific spending plan is the most basic and effective way to save money for families, applied by many people. The purpose of planning is to help you easily control your financial resources, as well as your family’s income and expenses.
You can apply the 50/20/30 principle, in which 50% of total income is spent on the needs of the whole family, 30% is spent on the wishes of members and the remaining 20% is used for savings.
Besides, you can also apply the 6 Jar rule to more easily manage your spending. With this principle, you need to divide your income source into 6 different jars, each jar for a separate purpose, including savings purposes.
2. Strictly control credit card use
Credit cards are becoming increasingly popular and are chosen by many customers. Because credit cards not only help you pay bills and services quickly and conveniently, but also have the feature of spending now and paying later, which is extremely useful. However, if you are someone who does not manage your finances closely, this feature can easily cause you to overspend and become a debtor. In addition, if you do not repay the loan on time, you will be charged overdue fees and the interest rate you have to pay is very high. Therefore, strictly control the use of credit cards to avoid bad debt, as well as spend more reasonably.
3. Teach children to save together
The habit of saving is a good habit that any parent should train their children from an early age. Parents can teach children from small things in the family, such as turning off the electricity when not in use, or not playing with water to avoid waste. Besides, parents can also apply principles such as only buying toys once a month. This will help children appreciate toys, as well as not be so demanding.
4. Cut unnecessary expenses
Expenses such as cable TV, house cleaning services, etc are fixed expenses in many families, but are not really necessary. If your family only watches TV 2 hours a day, or you have free time on the weekends and can clean the house during that time, you should consider cutting out these expenses. Cutting unnecessary expenses will help your family save a significant amount of money.
5. Thorough reuse
Thorough reuse is an effective way to save money for your family that you should not ignore. Old items belonging to older siblings such as backpacks, books, and toys are still in good use, and parents can let their younger children reuse them. Or older siblings, if they need to use a computer to study, they can use the computer with their parents. Reusing will help your family save a significant amount of money.
6. Record daily and weekly expenses
If you record your monthly expenses, you will estimate how much your/your family’s spending power is compared to your actual total income. There are “unnamed” expenses that seem small but invisibly erode your entire “rice bag”. If your expenses are large and difficult to control, you should cut down on unnecessary items.
7. Deposit money to save money at reputable credit institutions
You can deposit your monthly savings into banks or reputable credit institutions like TYM to earn profit. This amount of money is used to prevent risks and unforeseen events from happening to you. Currently, there are many banks offering online savings services with quite good interest rates. You can choose one of those banks to get more monthly interest.
8. Set a monthly and yearly savings goal
The amount of money you save is more important than the amount of income you have. Therefore, set clear savings goals monthly and yearly. Think about the extra money you want in the short term (less than 1 year), medium term (1 – 5 years) and long term (5 years or more). Then, recalculate how much you need to achieve and how long it will take to reach that goal. Finally, take notes and make savings.
Have we wondered how many of the 8 ways above have been used to achieve our savings goals? Let’s practice these methods every day with TYM!
-TYM, Research and Development Department-