Now that I’ve talked a little bit about the importance of financial literacy, I should spend a little bit of time giving you actual ways you can save money.

The first thing you need to do in order to save money is take a little bit of time to figure out how much money you are spending every month, and what you’re spending it on. You don’t have to do this, but I’ve found it very helpful to create a spreadsheet to track all of my spending, I also organize my spending’s into categories such as rent, groceries, going out, etc.

Now that you’ve taken a minute to see where you’re spending money, try to see if there are any areas you can cut back on. For example, when I first did this I found out that I was spending a lot of money on monthly subscriptions to multiple different sites. After seeing how much I was spending per month I reflected on how much I actually use/ need some of the subscriptions and was then able to cancel a couple of them, saving me money. $5 per month may not seem like a lot, but when you add it with other subscriptions it adds up quickly, if you want to see how much money you could save by cancelling one subscription simply take the amount you pay per month and multiple it by 12 to see how much it’s costing you per year, I was shocked when I saw how much I was spending and after cancelling a couple I have saved myself around $200 per year.

This isn’t the only way to save money, it was just one example that worked for me. You can apply this to any category of spending that you may be overspending on. The key here is to find out what you are over spending on, and then try to cut back and put that money in your savings, or invest it if you’re into that.

A common category that people overspend in is going out. I understand that you want to go out and have a good time with your friends but it’s important to pay attention to how much it’s costing you. I have two tips here, the first can be applied to any category, and it is to set a monthly budget on every category. Once you’ve spent all the money in that category, you’re done for the month. This allows you to still go out and have a good time, but stops you from over spending. The second tip is mainly tied to going out, but the overall idea can be applied to anything. Instead of going out to eat and spending money all night on drinks and food, why not have some friends come over to your house (or their house). My friends and I tend to hang out at each others houses instead of going out, it’s great because you still have a great time with your friends without spending an unnecessary amount. Why not order a couple pizzas and buy some drinks of your choice at store, then split the price by however many people are there.

One important thing about budgeting is to be realistic with your spending’s and set limits that allow you to have fun, because if you start stressing to much about every $5 purchase you’ll drive yourself insane or you’ll end up giving up on budgeting all together because it won’t be worth the stress. That’s why I want to focus on the point that budgeting doesn’t have to be about sparing every single penny and living frugally but instead setting realistic expectations for yourself to follow. This builds good money habits which will benefit you throughout your life.

To lazy to make a spreadsheet? Don’t worry, you can use this one that I made, all you have to do is download it and make a copy, then edit the categories (if needed). CLICK HERE FOR SPREADSHEET