Long-term savings are crucial if you’re looking to be financially independent. Whether you’re looking to tighten your belt to boost the amount you’re able to save, or looking to invest your money to generate returns, there are different methods of securing your financial future. Here’s 5 top tips to help you save money long-term.
1. Shop savvy
The key to saving is being smart with your money. If you plan your purchases in advance, you’re more likely to save money long-term; especially if you do this for bigger purchases as well. You can sign up to the mailing lists of your favourite brands and supermarkets, so you get sale notifications directly to your email. Bulk order offers are great – if you’ve got the room to store it all of course. Use loyalty cards and cashback sites. By being savvy with your purchases, you can achieve big savings.
2. Cut down on unnecessary expenses
We all love a takeaway every now and then, but it’s shocking how much this can cut into your budget if you’re not careful. Cook fresh food and you’ll save a lot of money, not to mention it’s much healthier. The same goes for eating out. If you go out, you’re more likely to increase your spend through drinks and extras, which you wouldn’t normally if you’re eating at home. This rule can be applied to most things, including TV or movie subscriptions and gym memberships. Small purchases such as cups of coffee and snacks also add up quickly, so cutting out on these ‘impulse’ purchases will give your savings an added boost.
3. Tackle debt first
This one might seem an obvious one, but it’s important enough to cover if anyone has any doubts. Where possible, cutting down debts such as your credit card or mortgage pay off in the long term. If you’re constantly paying off credit card bills, how are you meant to save money? Check what interest you are paying on any credit cards and if possible do a balance transfer to an interest free card. Become debt-free as soon as possible, and you can start to really save.
4. Get a job done right
Although many service providers claim to do a good job, many people are stung later down the line because a job wasn’t done correctly the first time. Whether you’re hiring a financial adviser or a building firm to complete some home renovations, choose carefully to prevent further costs. The same goes for trying to do something yourself when you’re not qualified. For example, if you’re paying for home renovations and are looking to lay Laminate Flooring, a professional fitter would know how to prevent your floor warping. This is a costly problem to fix in future, with people often needing a brand new floor, so it’s best being left to the professionals in the first place!
This tactic all depends on how willing you are to take risks. With all investments, there is a chance that you will lose the money you put in. However, investing is a great way to build long-term savings, and is seen by many as a better alternative to a savings accounts. This is due to interest rates not keeping up with inflation, meaning your money’s buying power will decrease. To minimise the risk of losing, you should spread your money over multiple investments; also known as diversifying. Whether it’s stocks, products or the newly-popular cryptocurrencies, investing your hard-earned money might carry some risk; but when done correctly, it’s a great way to save for the future.