Whether it is about a company or an individual, the principle “money saved is money earned” applies to everyone. The finance world is full of theories and equations on how to save money. But when a business is about to be shut down for lack of funds, practical advice from businesses who have been there done that is more useful.
Besides, saving money is not only about how many numbers you back pocketed today. It is more about building the right habits and maintaining discipline. So, here we are with some money-saving tips that businesses and individuals can use to their benefit.
Cut Down on Office Expenses
With the pandemic showing us that “work from home” works good, businesses can implement it as a permanent solution. If not for all the tasks and roles, you can at least necessitate work for home for the roles and personnel who can work remotely without compromising on the work quality and output. Then let go of the extra space and shift to a smaller office.
Track your Spending
Without knowing how much you are spending on a weekly or monthly basis, it is not easy to build a saving plan. Hence, make sure to have a spreadsheet to record all your expenses and update it every day.
Going into the details, make sure to write down every aspect of your purchase to keep close track of your purchases.
This includes noting down;
● The product you have purchased
● For better understanding, create categories of your purchases. For instance, kitchen supplies, bedroom stuff, work expenses, entertainment, online shopping, etc. Jotting down the details will help you identify the high-spend categories and help you decide which category of expense you can avoid.
● Lastly, note down the cost of the product you have purchased. In a business setting, you may have to buy a lot of things and sometimes, it is easy to lose track of them if you are not noting them down.
An alternative to buying for business is leasing. Leasing equipment, tools, and machines will help you save the big upfront costs of buying them. Plus, you may not have to spend on maintenance and regular servicing of the equipment. As most lease agreements have these costs included in the lease payment.
Create Monthly Spend Reports
By the end of the month, you should have made a spending report. There is no need to use some fancy software to create immersive reports or do any such thing.
Keep it simple and use a spreadsheet in MS Excel or Google Sheets to note down all the data and figures. The essential part is to add all the categories you have created under a separate header and write the total expenses of each category.
Make sure that at all times, you have a total sum of all the categories, even between the month. This will bring to your attention the amount you have already spent and whether you can spend more on it?
For better understanding of the expenses and categorical spending, make use of integrated visualization tools. You will find more than enough of these tools in Google Sheets but they are limited in MS Excel.
Money Management System: Within the money management system, you need to cover several things. Setting saving goals is one part of this system. Others include setting a monthly spend budget, tracking your spending, and evaluating the expenses every month. Also, build a habit of spending money that you have (use cash or debit cards) instead of spending money that you don’t have (using credit cards).
A smarter way to save money is using discounts and coupons while making a purchase. There are plenty of platforms that will show the available coupons and discount codes for popular online shopping platforms. Make sure to subscribe to these platforms and websites and always search for discount coupons before making a purchase.
Cancel Subscriptions: There’s a subscription for almost every service, and you might have subscribed to them. From Netflix to Amazon Prime, Hulu, Apple TV, HBO Plus, and whatnot. If you are not getting any time to use these platforms, what’s the motive in paying for their subscriptions. Cancel the subscriptions you are not using at present and save money.
Step-Down Spending: This is a technique you can use to decrease your spending gradually. Step-down spending involves spending less money on an activity while getting the same result. For instance, instead of taking an Uber to work, take the bus or train.
For businesses, there are several other cost-saving practices that can be adopted. These include renegotiating the prices with the vendors and dealers, as they want to stay in the business. You can use technology to your benefit and onboard solutions that help with money management, tracking, and saving.
Saving money is the best thing you will want to learn and implement over time. It is a habit that will not only secure your business but also secure your future. The menace of splurging money or misallocating the resources in a business has dire consequences.
Hence it is essential that you get into the habit of saving money today and walk into the future with good financial health.