How to Be a Money Saving Expert
When you reach a certain point of financial stability in your life, saving money takes on a new meaning for any money saving expert. There are compromises to make, but they should never get in the way of enjoying life.
By learning to save like the experts, you can make better management decisions with your income. It’s simple, effective and should be at the top of your to-do list.
Banking will always offer you incentives to save money. When you want to be a real money saving expert, knowing the tricks of the trade is the first step. Upsells are common, but some banking features require a little more digging.
How long have you been using the same savings account? A lot of people have been with the same bank for years, and never actually looked at the fine print of their specific account.
This could mean picking a savings account for all of the wrong reasons, while complacency leads you to stick with it. One of the draws of a savings account is the minimum deposit required. When a low amount is needed, it offers an incentive to go all-in on a savings account.
A low minimum deposit on a savings account is usually beneficial to the bank, and not the user. Take a close look at the interest rate you’re currently getting.
Now compare it to a competitor, and you’ll notice a trend. The banks that don’t have a low minimum deposit amount usually have a higher amount of interest earned annually.
The difference may seem small at first but imagine how much money you would have earned by going with a different savings account. This is a lesson that proves an initial savings account should be chosen wisely.
But even if you are a few years in, there is no reason to stick with a savings account that doesn’t offer better service. Take your money elsewhere and allow it to earn a higher rate. As a money saving expert, your money should always be in a position to benefit your financial future.
If you travel a lot to the same place and the expenses are not covered by your job, then you should consider a timeshare. On the surface that sounds like the most ridiculous advice anyone can give.
Timeshares are associated with annoying salesmen, bad business practices, and retirees that take up all the good locations. But, just like anything good in life, you have to know the system can be gamed.
Timeshares are set up to upsell you into oblivion, day and night. Underneath the layers of frustration is a pretty sweet deal. For a flat annual rate, you get to visit incredible spots around the world.
In some instances, people have saved thousands of dollars a year in travel costs. The stereotype of the old couple getting fooled out of their money by a salesman is still true, so be aware of sales tactics.
It is no different than buying a car – the salesman will do everything in their power to get money out of you. Buy what you want, and then ignore them while you move on to the next task in your life.
Another way to save money on travel is with specific perks. Frequent flyer miles are the most notable programs but don’t forget about other options.
Getting a gas card will yield significant benefits when you do a lot of on the road traveling. And by getting away from cars that require fuel, you can further save while traveling.
Electric cars are cheaper, more efficient, and will save you money the instant you drive it off the lot. To be a money saving expert, you have to find your most used traveling means and shave off its most expensive component.
A car that requires fuel will not only break down faster, but it is a slave to the current fuel prices of the world. These fuel prices can go up and down, and there is absolutely no way to predict it. Even the savviest money saving expert can’t accurately depict the cost of fuel on a weekly basis.
Travelers who prefer the train are somewhat out of luck if they aren’t seniors or students. The only way to reliably save money on long train trips is to avoid them altogether.
Bills for A Money Saving Expert
Late fees are the main reason bills get higher than they need to be. By the end of the year, it is possible to pay an extra month on your bills due to the extra late fees. But you’re a money saving expert, right?
That means late fees are foreign to your mentality since bills are always paid on time. Usually, that would be true. But take a close look at your bank accounts and you may notice some irregularities.
Overcharging happens all the time, and a company will rarely notify you if it happens. The opposite isn’t true, however, if you owe them money. That’s when you can expect fifteen calls a day about upcoming payments, late payments, and underfunded payments.
The process for overturning an overcharge is painful, especially if it happened months ago. Mobile phones and internet packages are the most common types of bills to suffer from overcharges.
Even so, you should still pay close attention to utilities, loans, and any other payments that are auto drafted out of your account.
As a final note on bills, there is no reason to have auto draft unless the company provides a financial incentive. Never give a company full access to your account without a reason, especially when your savings account is tied to over drafting penalties.
Credit cards & loans
Use credit cards and loans in a smart way to ‘complete’ your credit. Having a perfect credit score doesn’t mean much when there is no buying power behind it.
Think about how much work you put into getting a high credit score, and then realize that there are millions of people with better scores. Having good credit doesn’t mean you won the game; it just means you’re on a good team.
A money saving expert doesn’t horde money when there are available investments. When you’re smart about investing, the small hit from credit cards and loans pays off in the long-term.
Taking a small loan out to flip a home is smart and has made many millionaires in the world. With a smart buy in and a little bit of work, you have the property that will bring you income on a monthly basis.
And if you’re really persistent, selling the house outright will pad your savings account. If you’re not using money to make money, then you’re not a money saving expert.
Take advice from people around you
Every money saving expert believes that they’re another Warren Buffet in the making. There is bad advice given out in finance all of the time, but sometimes there will be plenty of good advice.
The biggest surprise about being a money saving expert is realizing that you’ll never know it all. Someone in a worse financial situation is just as likely to give good advice as someone that is wealthy.
As a money saving expert, you have to listen at all times so that financial decisions are informed, well thought out, and have your best interests in mind.
By being that person, you’re more open to networking opportunities. If a business venture opens up that needs an investor, you’re likely to be the first person they call (for better or for worse).
Take money saving tactics seriously. A lot of life factors depend on intelligently managing your money. Getting a promotion doesn’t mean much if you’re still living paycheck to paycheck. When you learn to save correctly, it becomes a feature, not a requirement.
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Money Saving Expert FAQs
How can I invest 50k wisely?
Here are a few ways you can invest £50,000 wisely:
1. Invest: Try researching some high return investment options such as stocks, bonds, a CD, or cash in a money market account.
2. Get Sound Advice: It’s worth it to consult with a financial advisor to make sure your investments are allocated in a way to make you the most money.
3. Stock Your Emergency Fund: You never know when a rainy day will come along. Keep 3 months’ worth of expenses in a savings account just in case.
What should I do with 20k in savings?
Here’s what you should do with £20,000 in savings:
1. Invest with a broker: Not sure where to begin? Trust an expert to steer you in the right direction.
2. Invest in real estate: A good investment property will bring you income month after month.
3. Try out peer-to-peer lending: Want to help a small local business? Help your community and earn some interest along the way.
4. Stock Your Emergency Fund: You never know when a rainy day will come along. Keep 3 months’ worth of expenses in a savings account just in case.
How much savings should I have?
Here’s a quick answer to how much savings you should have: A general rule of thumb is to have one times your income saved by age 30, twice your income by 35, three times by 40, and so on.
Aim to save 15% of your salary for retirement — or start with a percentage that’s manageable for your budget and increase by 1% each year until you reach 15%.
How can I reduce my monthly expenses UK?
Here are some ways you can reduce your monthly expenses in the UK:
1. Work out what it costs in work time: When you want to purchase something, thinking about how many hours you’ll have to work to earn the cost of the item can sometimes hinder unneeded spending.
2. Focus on your debt/savings: When you get your paycheck, pay yourself first. Put money away in savings or towards lowering your debt before spending it.
3. Check if you’re spending money on unused subs & payments: Go through your monthly expenditures. Is there anything you can cut out?
4. Stop spending so much on food: Meal prep and don’t eat out. It’s simple, but not always easy to do. Once you get in a routine, it gets easier.
5. Leave debit/credit cards at home: If you’re going out, pack a lunch and leave your money at home. If you can’t spend, you won’t spend!
6. Avoid temptation – don’t go shopping: Sales are great for when you need something, but only buy what’s on your list of things you need. Shopping for leisure can lead to unneeded spending.
What can I cut out to save money?
Here are some things you can cut out to save money:
1. Refinance your home and/or automobile.
2. Consolidate your student loans.
3. Consolidate your debts using a balance transfer card or personal loan.
4. Request a credit card rate reduction. If you’ve been paying your credit card off on time for a while and have been a good customer of the bank, call them up and see if they can get you a better deal.
5. Sign up for automatic debt repayment plans.
6. Sell unused items. Every Christmas and birthday we get more and more items that pile up around the house. If there are any items you barely used, consider selling them.
How much do I need to invest to make 4000 a month?
Here’s how much you need to invest to make £4,000 a month. £4,000 a month is £48,000 a year. At a 1% return, you’d need £4,800,000 in investments.
Just multiply 4,800,000 x 1% or 0.01. The S&P 500 stocks yield approximately 2%, and the principal is cut in half.