If you find it hard to save, it may be time to create a budget. A budget lets you track where your money goes and can help you free up cash for savings and long-term goals.
Starting a budget is relatively easy; you can use a budgeting software, or simply jot down your income and expenses on paper. Before starting, however, its a good idea to analyze your spending for a month to see where your income goes. Your spending can be broken down into three categories: Fixed Committed Expenses such as mortgage or rent, Other Committed Expenses such as groceries and utilities, and Discretionary Expenses like eating out. And dont forget to budget funds for savings goals.
To free up cash for savings, begin by reducing Discretionary Expenses, then look at Other Committed Expenses, some of which can be reduced by simply planning ahead. Aggressively paying down high-interest-rate credit card debt will also help. If your credit card debt is high, consider paying it off with a home equity loan, which may offer a tax deduction, or a consolidation loan.
Remember that the key to making a budget work is discipline: Making yourself record daily expenses regularly, and making sure you adhere to your self-imposed spending guidelines will ultimately pay off through better spending habits and increased savings.