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Personal Finance Tips
25 Aug 2021

12 Personal Finance Tips to Help You Save More Money in 2021

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Maybe you’re looking to buy a house? Perhaps you’re hoping to buy a new car? Whatever the case may be, you need to save more money in 2021.

The only problem is that you’re not sure how. That’s where this article comes in. Below, we’re going to provide you with 12 personal finance tips, helping you to build up your bank account in 2021.

Let’s go!

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1. Create a Budget

The first thing you should do is to create a budget. This way you’ll know exactly where your money is going, and exactly how much you could potentially save each month.

To facilitate this, you can use an Excel spreadsheet, a piece of paper, or a modern budgeting app. We recommend an app, as it provides all sorts of useful features that you won’t get with the others.

In any case, you should lay out all of your usual expenses. These will include rent, utilities, car payments, loan payments, and the like. These will undoubtedly be coming out of your paychecks and should be accounted for first.

Then, you can add the other stuff, like the coffee and the restaurants and the clothes and the streaming services. These items aren’t always necessities, and their expenses can often be minimized in some way. For instance, you could make coffee at home as opposed to getting it at Starbucks or Dunkin’ Donuts.

Having all of your expenses laid out in front of you this way puts you in a position to shape your budget to your liking. Want to save an extra $100 every month? Your budget will enable you to see where that $100 could come from.

2. Get Your Debt Down in Writing

Debt is scary. In fact, it’s so scary that individuals will sometimes choose to ignore it, just to save themselves from the emotional pain of having to deal with it.

Put simply, this is a bad idea.

Yes, it can hurt to see how much you’re in the red. It can feel hopeless and depressing. But if you don’t face it, it’s just going to get worse.

As such, if you’re saving in order to pay off debt, you need to write all of your debts down on a piece of paper. Add them all up and see what you’re dealing with.

Then, work each of them into your budget, and strategically plan out how much money you’ll put towards them each month. This will enable you to see how long it will take to pay them off, and will, at the very least, show you that there’s light at the end of the tunnel. That light can be the inspiration needed to help you save the necessary funds.

3. Save First and Pay Bills Last

When it comes to allocating money each money, it’s common for us to pay off our most necessary bills first, and then save leftover money afterward. This is natural, as we don’t want to end up car-less or out on the street.

But, as far as saving money goes, it doesn’t offer much incentive. After all, a house is comfortable. So, as long as we get to stay in ours, we feel reasonably content.

Sure, we want to save money, but we don’t feel the absolute need to. This is because there’s no desperation involved.

Saving first adds desperation to the equation because we’re all desperate to pay our rent and other important expenses. And while financial desperation isn’t a great feeling, it’s undoubtedly an incentive to spend less and budget more carefully.

So, in short, if you’ve got the guts and the self-control, you should try this. It could be just the kick you need to get you started.

4. Pick Up a Side Hustle

Maybe you’re already narrowed down your expenses? Perhaps there’s no more money left to save? You can’t get blood from a stone, so how are you supposed to increase your savings?

The only option is to bring in more income. There are two general options for doing this: 1. get a new, higher-paying job, or 2. pick up a side hustle. For most people, #2 will be a more viable option.

Fortunately, there are all sorts of side hustles out there. You can become a freelance writer, you can resell items on eBay, you can start a small landscaping business, and etc.

Remember: you don’t need to bring in another $1,000 a month. An additional $100 monthly will score you $1,200 extra each year.

5. Invest

If you’re not investing already, you need to start. Investing your money is the absolute best way to make it grow. Over the years, it can yield you tens of thousands of dollars in extra savings.

Now, this doesn’t mean you need to keep up on stocks and aggressively play the market. In fact, for most individuals, we advise against that. It’s just too big of a risk for most to take on.

Instead, you should put your money in something like a CD or a mutual fund. These investment vehicles are much less risky and will almost certainly provide you with good gains over time.

6. Be Methodical

Saving money is a marathon, not a sprint. You can’t just forego all of your bills for a month and keep all of the “savings” in your bank account. You have to stow your money away little by little.

As such, when saving money, you need to be methodical. Set a monthly limit for savings and make sure to save it. Treat it like you would any other bill and even set a due date for when it has to be put into your account.

It might not seem like you’re saving a lot at the time, but when you look back in 6 months, you’ll see that your savings are actually substantial.

7. Have a Goal

Saving money for no reason other than saving is financially wise. However, for most, it doesn’t offer a lot of inspiration. Most human beings need to be rewarded for their efforts.

This is why, when saving money, you should set a goal. Are you saving this money so that you can retire comfortably in 30 years? Maybe you want to buy a boat? Perhaps you’re looking for a forever home for your family?

Knowing that your savings will eventually have a positive effect is vital in staying the course. You’ll be much less apt to blow your money on eating out if you know you’ll get something better as a reward for saving it.

8. Gauge Your Potential Purchases

There’s no better way to deplete your savings than by going out and impulse buying. Spending $20 on a shirt you don’t really need is essentially just taking $20 away from your savings. Make 4 of those purchases a month, and you’re losing $80 worth of savings a month or almost $1,000 a year.

That’s a lot of money to be spending for essentially no reason. For this reason, when thinking about making a purchase, you need to decide on whether the purchased item’s impact outweighs the impact of accumulating money over time. In short, you need to gauge your potential purchases.

You might be dying to eat out but is spending $50 for a meal really going to benefit you in the long run? Sure, it will feel gratifying at the time but that time will quickly pass, and, all of a sudden, you’re out $50.

9. Participate in Free Activities

In many cases, it can feel like you have to pay an arm and a leg just to have a little fun. Going to the bar can cost you $20 for just a few drinks. Heading to the movies can cost you $15 or more depending on whether you get the big popcorn.

Concerts, athletic events, museums: these all cost substantial amounts of money. As such, if you’re going to them on a regular basis, you will undoubtedly have trouble saving.

This is why you should instead start looking to free activities. Take up hiking or bicycling or yoga or some other exercise. Buy a cheap guitar and learn how to play it. Read books from the library.

You don’t need to spend a lot of money to enjoy life. There are all sorts of fun and frugal activities for you to pursue.

10. Stop Charging to Credit Cards

If you’re in debt and are trying to save money in order to pay off that debt, the last thing you want to do is to create even more debt. At that point, you’ll just feel like you’re swimming in quicksand.

As such, you need to stop charging expenses to credit cards. Yes, even if you plan on paying those expenses off at the end of each month.

See, the problem with credit cards is that they take money from you without reminding you that they’ve taken money from you. So, you’ll continue to spend your actual money as if you don’t need it to pay off your credit card debt.

The only problem is that you do, and when the credit card due date comes, the money you had no longer exists. All of a sudden, you’re in even further debt than you were before.

Don’t let this happen to you. Cut up your credit cards if you have to. Just don’t put any more charges on them.

11. Talk to Your Family About Finances

Even for a single individual, saving money can be difficult. When it comes to families, saving can be downright grueling. You have to control not only your habits but those of your spouse and kids also, all the while compromising on some aspects of spending.

For this reason, when deciding to buckle down on saving money, you need to talk to your family. Let them know that you’re trying to save extra money and that you’d like to cut spending in some areas of life. Tell them why saving is important and let them have a little say in the matter as well.

You might not get everything you want, but you can come to a fair compromise. The key is to lay it all out there and treat the others in your family with respect. With any luck, they’ll understand where you’re coming from and join you in the effort to accumulate savings.

12. Treat Yourself from Time to Time

Saving money undoubtedly requires sacrifice. You’re going to have to cut corners in a great many areas. However, that doesn’t mean you should never reward yourself in the short-term.

You should still treat yourself from time to time, whether it be with a meal at a restaurant or a concert or a round of golf or otherwise. Rewarding yourself throughout the saving process can help to keep you motivated and prevent you from derailing yourself.

The key is to make it special. For instance, don’t eat out every other week. Go once a month or once every 2 months. And when you do, make sure you’re getting everything you want to eat.

And don’t go to see live music every weekend. Wait until your favorite band comes around and spend money on just that concert. Doing so will make the experience all the more special.

In short, do everything in moderation. Indulge yourself but don’t over-indulge yourself.

Looking for More Personal Finance Tips?

Now that you know a thing or two about saving money, maybe you’re looking for more personal finance tips? If so, you’re in the right place. Bonsai Finance has you covered.

We cover all sorts of financial topics, from credit cards to loans to bank accounts and much, much more. Our website will turn you into a financial expert.

Start your journey by browsing our blog!