In this type of economy, we could all stand to be a bit more frugal and store away our hard earned dollars. Budgeting to make ends meet is relatively plain and simple. Budgeting to save money, however, isn’t easy. It is difficult to set aside money and let the balance grow before it starts burning a hole in your pocket. The desire to spend is often stronger than the desire to save, but it is high time that we start looking for ways to spend less and save more.
How can you achieve your maximum savings potential? Read on to discover three ways to budget for maximum savings.
Conduct a Needs Assessment
When budgeting to save, it is important to determine what things you actually need in life. This is commonly known as a needs assessment. There are two words that we commonly confuse: want and need. We all want to go to the gym 3-5 days a week. But we really need to buy groceries to sustain ourselves. Therefore, the $50/month gym membership (that we haven’t used since last December) is something that we can definitely forgo to achieve maximum savings. That $50/month can easily be routed into a savings account, while a brisk walk or bike ride can replace the occasional trip to the gym. The same can be said for our expensive unlimited cell phone plan, premium Netflix package, and additional storage unit outside of town.
If you are looking for ways to budget for maximum savings, chances are that your friends might be interested in doing the same. Several of your friends might like to practice budgeting to save together. Combine forces on some of the things you naturally do together to achieve maximum savings. Share movie rentals, take turns cooking gourmet meals at home instead of going out to eat, and carpool to save money on gas.
Budgeting to save can be fun and easy if you enlist your friends in your cause. Your required funds for leisure and entertainment activities will become significantly smaller if the members of your social circle are on the same path toward maximum savings.
Pay a Nonexistent Car Payment
Did you just finish paying off your car? Don’t be so hasty to stop making that car payment each month. One of the best ways to achieve maximum savings is to continue paying your car payment into a savings account.
The account can be used in two ways. First, you can use it as a “maintenance account” to make repairs to your newly paid in full vehicle, which is sure to break down at some point in the near future. Or, you can use it as a special savings account from which to purchase your next vehicle outright.
These three simple ways to budget for maximum savings are guaranteed to help the balance in your savings account soar. Old spending habits die hard, but you can achieve your maximum savings potential by applying these ideas in your own life.