There are numerous ways that investors choose to do to make sure they have a continuous pool of funds for their investments. Most investors have full-time jobs, and they set a portion of their salary for investment ventures. However, there are other methods to use if the salary from a stable job is not enough or you simply want to increase your deposit through different means.
Being able to save up on your money can be beneficial for you in the long run, but it can also help you raise your credibility. You can increase your funds to invest on more properties, or you’ll be able to put down a bigger deposit and potentially make a huge difference. These tips can be generally used in any life aspect, but this article shall prove to be a reminder to property investors on how to ensure you have funds for your investment.
Before you can start on anything, you have to assess your current status. Yes, you want to have more funds for property investments and increase your serviceability. ‘How you would be able to do that?’ is a good question, but it’s also better to ask yourself, ‘Why would you want to do that?’
You need to set a few goals like wanting to buy a new investment property or upgrading your current investment portfolio. Having these goals will help you as you adjust your financial situation. The tips that will be discussed sound easy to do, but it’s a matter of persevering through moments of hardships as you do these approaches. Remember that diligently doing these practices can benefit you in the long run and the goals you’ve listed down can actually give you guidance and strength.
I Want to Invest More, but How can I Get the Funds for my Investments?
In essence, bootstrapping is one of the first methods investors utilize when wanting to ensure funds for their investments. Bootstrapping is the process of financing an investment without relying on outside cash sources or conventional financing techniques. A form of bootstrapping is when the investor is making use of their available resources to reduce their expenses and maximizing cost optimization.
Even when you’re steadily earning money, cutting expenses creates additional financial opportunity and flexibility. Regardless of income level, practicing frugality encourages discipline and an attitude of thoughtful spending to reduce lifestyle inflation. Lifestyle inflation happens when increased earnings lead to a corresponding increase in spending. Even though bootstrapping emphasizes being careful with spending, it’s still crucial to take reasonable risks when making these decisions. Make strategic decisions that are in line with your investing objectives after evaluating the possible risks and benefits of each opportunity.
What are Some Practices or Approaches to Save up Some Money?
Keeping track of general earnings and expenses is the key to providing a clear perspective of your financial situation. You’ll be able to understand what you currently have. Thus, you can enable effective budgeting with what you can work with. It’s better to start monitoring your expenses daily. However, working with a small time frame doesn’t seem to make a difference in your point of view. It would be better if you compile your daily, weekly, and monthly expenses.
Since you’re diligently monitoring your expenses, you’ll be able to immediately identify areas of overspending or see other alternatives to work with. You can make informed decisions if you can reduce your spending based on this factor, allocate resources, or cut it off entirely. As you regulate your expenses, you can make adjustments and figure out what you can prioritize.
Keep in mind that there can be an extensive list of other factors to consider, but here are some points you can personally review.
1. Refraining from cashless or online transactions
Cashless transactions are incredibly convenient. However, this is your number one enemy, especially when you’re trying to save up. Seamless payments can foster impulse buying because of how effortless it is to make purchases. Cashless options like mobile wallets or contactless cards are often linked to your bank accounts or credit cards, which can also lead to overspending.
The advantage of online transactions is that you will be provided with digital records of all your transactions. Making it easier to track and monitor your expenses to maintain control over your financial situation. Practising mindfulness and discipline when using cashless methods can help avoid unnecessary expenditures and stay focused on saving up for your property investments.
2. Reviewing paid subscriptions
With the ease of online transactions, another thing to list down are all your paid subscriptions. Subscribing to a service or product line may give you continuous access to enjoy a consistent and uninterrupted experience without the need for frequent manual intervention. Most subscriptions offer automatic billing and delivery that can lead to unnecessary expenses that accumulate over time.
When you handle multiple subscriptions, sometimes it is easy to overlook or forget about the recurring payments. Majority of subscriptions automatically deduct from your listed credit card or bank account. Depending on your subscription option, you may be paying monthly, quarterly, semi-annually or annually. This can eat up your savings without you knowing and this can hinder your progress in reaching your financial goals. It is crucial to periodically evaluate and review subscriptions, deciding which ones are necessary, and cancelling or downgrading any that are not affecting one’s priorities or well-being.
3. Using energy and utilities efficiently
Implementing energy-saving measures lowers your utility bills which leads to long-term savings. To be conscious of energy consumption like turning off lights and unplugging devices that are not in use can significantly decrease energy expenses. Nowadays, appliances and devices have certifications and it’s easier to know if certain appliances have high energy efficiency ratings. Compared to conventional appliance models, they can perform the same functions while consuming less energy.
LED lighting consumes less energy and have a longer lifespan. If you have any incandescent light bulb, it is better to replace them with LEDs. It goes without saying that natural lighting and ventilation is low cost, thus it’s best to maximize these elements to moderate your reliance on artificial lighting and mechanical cooling or heating. It’s normal to still use HVAC (heating, ventilation and air-conditioning) systems, but make sure to regularly maintain and have the systems serviced to avoid energy waste.
4. Commercial food service
The cost of ordering out or eating in restaurants can greatly impact your budget. It’s essential to think about the value you’re getting for your money when purchasing food outside. Compare the quality of ingredients used, portion sizes, and prices of different food establishments. Being mindful enables you to prioritize economical yet nutritious choices and make informed decisions.
More cost-efficient options would be bringing packed lunches or bulk cooking at home and freezing leftovers. Of course it would take you time and energy to do so, however it would certainly reduce your expenses. Buying ingredients in larger quantities for bulk cooking is usually more cost-effective compared to purchasing individual servings or meals. By planning meals and utilizing leftovers, you can maximize the value of your groceries and minimize food waste.
5. Explore the sharing economy
The shared economy, also known as collaborative consumption, is a system where people can share goods, resources, or services with one another to promote convenient and efficient asset utilization. This includes renting of idle spaces and underutilized equipment rather than purchasing them outright. Examples of these would be co-working spaces, ride-sharing services, home-sharing platforms, and the like.
This approach encourages a more sustainable approach to resource utilization. It promotes a sense of collaboration and community involvement while reducing waste. These platforms frequently include user evaluations, secure payment channels, and other features to help both vendors and consumers build confidence and conduct smooth transactions. The shared economy provides a number of advantages, including cost savings, enhanced convenience, decreased environmental impact, and the ability for individuals to make extra income from their assets.
6. Minimalize your lifestyle
Adopting a minimalist lifestyle involves decluttering and simplifying your physical space. You become more conscious of the material goods you bring into your life. It also encourages a greater awareness of your financial situation. You can easily identify items and assets that no longer serve your investment goals and you can sell them for extra cash.
Minimalism encourages you to evaluate the worth of the items you own or intend to purchase. It moves the emphasis from quantity to quality, encouraging you to invest in products and assets that are long-lasting and functional. You can prevent mindless consumerism by analysing the genuine value of a product in terms of its usefulness, duration, and impact on your life.
7. Opting for car rental or commuting
Choosing car rental or alternate modes of transportation might provide financial flexibility, especially if you aren’t using a car on a regular basis. The cost of owning a car includes a variety of fees such as fuel, maintenance, insurance, registration, and depreciation, which can add up over time. Finding parking spaces and navigating traffic in busy urban areas may be time-consuming and frustrating. You can let someone else drive by using public transit. This allows you to relax, be more productive, or even enjoy your journey by reading, listening to music, or catching up on work.
It’s important to note that whether you choose car rental or commuting is determined by your individual circumstances, such as your location, transportation needs, and the availability of reliable alternatives. Owning a car may be more practical or required in some situations, especially if you live in a remote place or require a vehicle for frequent and specific activities.
8. Plan free or low-cost entertainment for friend/family hang outs
Even though you’re trying to save money, that doesn’t mean that you should refrain from meeting with your family or friends. It’s a matter of spending time with your loved ones and it would also be better if you bring up to them that you currently have a set investment goal to achieve that’s why you’re suggesting free or low-cost entertainment.
Organizing a game night, cooking together, or going on a picnic in the park all provide opportunity for meaningful interactions and conversations. There are other entertainment options that involve collaboration and teamwork, whether it’s board games, puzzles, or DIY projects. This allows you to enjoy experiences and create memories without compromising your savings plan or incurring high unnecessary expenses.
9. Develop multiple streams of income
Your experience and your skills, whatever they may be, they will be extremely useful for someone else. The goal is to look into ways to increase your income by working part-time or freelancing. A lot of investors have multiple streams of income and they may have done different types of side hustles since it can diversify their sources of earnings and accelerate their savings.
Side hustles frequently provide scheduling flexibility, allowing you to decide when and how much you work. Being flexible allows you to balance your side hustle with your primary work and other responsibilities, making it easier to save money without jeopardizing your current responsibilities. You have more control over your earning potential and can match your side hustle efforts to your financial objectives.
10. Discounts, coupons, cashback and rewards
Taking advantage of discounts and coupons allows you to be a more savvy and observant shopper. You can save a large amount of money on your everyday purchases by taking advantage of cheaper prices and using coupons, whether they be food, clothing, household supplies, or entertainment. It encourages you to browse around for the greatest offers and make informed buying decisions.
Cashback schemes allow you to earn a percentage of your purchase price in the form of cash or credits. These cashback benefits add up over time, providing you with extra dollars that you may put in your savings. Rewards programs provide additional incentives and privileges in exchange for your loyalty as a customer. You can earn points, miles, or other types of incentives depending on your expenditure. These points can be redeemed for a variety of perks, including discounts, free products or services, travel upgrades, and even cashback.
Why Should I Keep Increasing my Savings and Reducing my Expenses? I have the Means to do it, but Why do I Feel Discouraged to Actually Regulate my Finances?
‘I seem to lack motivation or inspiration to continue saving even if I have my goals set.’
‘I don’t think I’m capable of saving any of my money or reducing my expenses.’
These statements are completely understandable. Hopefully this can also serve as an encouraging reminder especially when you feel like you shouldn’t be saving and you don’t need to manage your expenses.
You may have forgotten a few things which can actually impede your desire to reach a favourable outcome. Contentment is one thing that you may lack. Being content allows you to find satisfaction and happiness in the present moment, regardless of your financial circumstances. Instead of constantly striving for more or feeling dissatisfied with what you have, practicing contentment helps you appreciate and make the most of your current resources and experiences.
Through hardships, you still need to celebrate the small victories. Saving money can sometimes feel like a long and challenging process, you will eventually get discouraged or overwhelmed. Acknowledging and celebrating the small milestones you achieve along the way can boost your morale and keep you motivated to continue working towards your goals. This helps to maintain a positive mindset and prevent burnout.
There are other things to also consider, but celebrating your small victories and practicing contentment are two of the top things to do. They work hand in hand to create an optimistic and sustainable outlook towards your financial goals. It can stimulate and cultivate gratitude, mindfulness and a sense of fulfillment. Simply recognizing and celebrating your own accomplishments, you might find your savings journey more enjoyable and rewarding.