Spend Money Wisely: How to Save Money

The end of the month can be a scary time to look at your bank balance. But how do we change our ways to make sure we’re spending our money wisely?

It’s an all too common situation.You go to check your bank balance near the end of the month to see how much money you have left over, and you’re left wondering what the hell happened!

It’s a grueling few days until the next paycheck, especially when you don’t even have anything to show for the last one. You’ll probably promise yourself that next month will be different, but we all know that as soon as that money hits our accounts, we fall back into the same old routine.

So how do we fix this?

Setting up a budget and tracking your spending are great starts. You can also put in some effort to try cutting down on some of those needless expenses.

Spending your money wisely means getting the most out of that hard earned cash. Everyone needs to do some reckless spending every now and again, but if you get into the habit of prioritizing your spending, you’ll see your savings account grow.

Try to teach yourself to sit down the day you get paid and assign your income according to steps below.

Step 1: Pay Yourself First

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It’s far easier to spend what you don’t save rather than to save what you don’t spend, so get it out of the way first and pay yourself!

You should decide to save a certain percentage of your monthly income (10% is a good target, but you can start with as little as 1%), so take that money out right away and get it into your savings account.

You can even organize an automatic transfer with the bank so you don’t even have to think about it.

Step 2: Budget for Absolute Essentials

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There are some things you just can’t do without, like housing, food, and electricity.

To ensure you have the money to survive the month, get these payments out of the way next. Even if your rent isn’t due for a few weeks, get that money into an account that’s set up for that purpose. You should also set aside whatever is in your budget for food and utility bills.

Remember, just because something is essential doesn’t mean you should splurge on it. Keep within your budget on essential items and try to cut down wherever you can.

Step 3: Pay Off Debt


Paying off the minimum amount on your credit cards and loans will cost you serious money over the long run.
You should pay off whatever you feel you can afford each month – regardless of how attractive the minimums are.

If you have a lot of separate loans, it may be easier to consolidate them into one repayment. Never be afraid to talk to your lenders if you are finding it hard to pay off debt – they will usually be happy to restructure the loan rather than see you go bankrupt.

The worst thing you can do is pretend there is no problem when there is.

Step 4: Buy Smart Non-Essentials

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Smart non-essentials refers to those items that are not essential, but will benefit you in the long run.

This could include replacing your old refrigerator with a new one that will save you on energy costs, or buying a bicycle in order to eliminate your transport costs.These may seem like big once off purchases but they’ll end up paying for themselves over time.

Just because you can’t afford a smart non-essential this month, don’t go spending that money on something frivolous. Save the money in a separate account and add to it next month.

Step 5: Buy Luxuries


Now that all that is taken care off, the rest you can spend on luxuries.

Keep in mind, luxuries don’t mean designer handbags – this refers to anything you want to spend money on but don’t need to spend money on. This might include dining out, going to concerts, saving for holidays etc.

You should always try to ensure there is some money left for luxuries as life would be pretty miserable without them, but putting them last on the list of priorities means you’ll be more selective about which are important. It may sound difficult, but remember that everything else you’ve set aside is more important in the long run.


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