Whether you’re planning a big purchase, or you just want a fund set aside for emergencies, saving money can be a daunting task. You can do a few things to reach your savings goal in 2018 and stay on track with your finances.
Lower Your Expenses
It’s difficult to save if you’re not working with much to begin with, but every little bit counts. Take a look at your finances to see where your money goes and look for expenses that you can afford to cut back.
Many financial experts advocate the “50/30/20” budget as a good starting point for aligning your savings goals. With this budget, 50% of your take-home income goes to your essentials, such as your mortgage, rent, vehicle expenses, etc., while 30% goes towards savings and paying off outstanding debts. The remaining 20% is for non-essential personal use, so the “luxuries” you enjoy on a regular basis like dining out, weekend trips, or your gym membership.
20% for savings is the absolute minimum that you should be putting aside for a rainy day, so see if there are any luxuries you could do without to put more money into your savings accounts. Skipping just a few dinners or nights out adds up over time.
Plan to Save Half of Any Extra Cash
If you get a raise or a big bonus, have a small lottery win, or any other stroke of good fortune, commit to putting at least half in your savings. While you may be tempted to splurge a little, you were comfortable living without it, so you can certainly afford to put half away. This will put you much closer to your financial goals.
Negotiate Your Bills
You can often reduce your monthly bills by calling your service providers and negotiating discounts, removing unnecessary features, or opting for a lower service plan. Your cable, cell phone, and internet service providers are just a few examples, but this opportunity exists for others as well. Review these bills and see if there’s a better deal available, then put the difference into your savings.
Save for Vacations and Splurges
If you’re considering an expensive vacation, a new car, home renovations, or any other big purchase, don’t pay for it with credit and worry about the debt later. Not only is this a surefire way to get yourself deeper into debt, but it’s never a good idea to live outside of your means.
In addition to your savings plan, put separate money aside for your splurge. You’ll be surprised at how quickly it will add up, and it won’t derail your ultimate savings goals. You can use a piggy bank, a jar, or anything else to store loose change or small bills and save up for that down payment or big purchase.
Interest on credit cards is enough to keep you from getting ahead, especially if you racked up a lot of debt. You don’t want your 20% income to go toward interest, as opposed to actual credit, so research different debt consolidation options to lower your interest rate. Often, one personal loan is enough to pay off your credit card debt and leave you with one low-interest monthly payment.
Trying to divide your money between multiple credit cards can make you feel like you’re just spinning your wheels. If you can’t clear all your credit card debt at once, or a loan isn’t an option for you, focus on paying off the biggest debt first, then worry about the rest. By doing this, you’ll be able to lower your principle and slowly chip away at your debt.
Make Your Money Work for You
Savings accounts can help your money earn interest over time, but they’re not all created equal. Interest-bearing checking accounts, money market accounts, and high-yield savings accounts can help you earn more interest on your savings account, which gets you to your goal faster.
Track Your Spending
While it may be tempting to just ignore your financial issues, the best way to reach your financial goals is by knowing where your money goes in the first place. Start tracking the money you spend on a daily basis to look for areas of improvement, such as your expensive morning coffee or that newsstand magazine, and commit to changing that habit. After a few months of saving, you can reward yourself with that coffee as a reminder of how far you’ve come. You may find that you enjoy it even more.
To make this easier, many banks have apps and calculators that use graphs to break down your expenses each week or month, so you can see exactly where you spend your money.
Plan Your Meals
Many people have busy lives and eat on the go, but dining out is a significant expense that adds up over time. Even small changes, such as preparing your own coffee and breakfast, packing your lunch, or planning your dinners in advance, can help you save hundreds each month on meal costs.
Automate Your Savings Account
Using automatic deposits for your paycheck or bank account makes saving money simple. You can either have money deposited into a savings account directly from your paycheck, or you can automate savings with your bank account. Some banks even offer automated savings for the remaining change on your debit card purchases.
Take Advantage of Savings
Many apps offer coupons, rebates, sales or other incentives on items you buy each week. It only takes a few minutes a day to find the savings you need to cut back on your weekly spending and get better deals where you can.
However, when you save money on a purchase because of a sale or coupon, it may be tempting to spend the money elsewhere. This is an opportunity to set some cash aside, however, and build your savings even faster.
Get a Clean Slate
It can be difficult to commit to a savings plan if you’re drowning in debt, credit cards or otherwise. If you’re recovering from a financial hit and need to get back on track, such as unexpected vehicle repairs, consider taking out a personal loan to start fresh and take control of your current debt.
Unlike debt consolidation loans, a personal loan has a low fee and is flexible to use, so it can be a great option to get back on track. Check out the cash loan options from Koster Cash Loans and get a jump on your savings plan today!