Most Americans only have $1,000 to $5,000 in savings. With COVID-19 leaving more people out of a job, it’s important to have a plan. Are you ready for a rainy day?
Here are 10 money saving strategies that can help you put money back into the bank. Whether you want to save for college or a house, these tips can help.
Instead of stressing out about money, you can prepare for the future! Start saving penny by penny with these 10 easy tips today.
1. Establish Your Goals
Have you tried saving money in the past, only to end up spending it away? It helps to set a goal for yourself. A SMART goal will keep you on track to turn goals into success stories.
SMART stands for Specific, Measurable, Attainable, Results-Driven, and Timely.
For example, you might set a goal to have $10,000 saved before your wedding in August 2021. Maybe you want to save a specific amount of money for your first year of college.
Do you want to save for your child’s college fund or retirement?
Set a goal and keep in mind as you use the rest of these saving strategies. Your goal will remind you why you need to remain diligent.
You can break a large goal into smaller milestones. For example, instead of trying to save $10,000 over the span of a year and a half, break it into monthly saving installments.
Once you set your SMART goals, you can use the rest of these tips to start saving!
2. Keep Track
Let’s take a look at your expenses for the past month. Gather every bill. Don’t forget your paycheck stubs and bank statements as well.
How much money do you have coming in every month? How much are you spending (and where)?
Breaking your expenses into different categories. These can include:
- Rent and utilities
Where are you spending the most money each month?
If you want to start saving this year, set a hard monthly budget for each spending category. Don’t forget to allocate money for paying off your debts, too.
Once you set your monthly budgets, track your progress. Are you overspending in one category compared to another? Make adjustments to your individual budgets.
Don’t increase your overall monthly budget, though. If you have money left over at the end of the month, put it toward your savings.
3. Get Rid of Every Debt
The average American has $90,460 in debt. These debts can include:
- Mortgage loans
- Credit cards
- Auto loans
- Home equity lines of credit
- Student loans
- Personal loans
It’s important to pay off your debts as soon as possible. Otherwise, they’ll keep weighing you down.
You can strategize to pay off these debts by focusing on the debt with the highest interest rate first. This strategy, known as “debt avalanche,” will help you pay off that debt fastest. Meanwhile, you’ll pay the minimums for your other debts.
4. Reduce Your Taxes
Any small changes you make to your current spending habits can help you learn how to save money in the long run. For example, you can find new ways to lower your taxes.
Make sure you choose the right filing status. Consider the tax rules when you claim your dependents, too. Are you using the child tax credit for your children?
Are you investing to build the money you’ve saved?
Make sure you’re not overspending on your taxes each year. To avoid overspending, speak with a professional. They can help you strategize before you file your taxes this year.
5. Have a Rainy Day Fund
What if a sudden storm causes damages to your home, or you’re in a car accident? Do you have a budget set aside for these emergencies? If not, it could put you even more behind paying off your debts.
Create a rainy day fund in addition to your general savings account. This rainy day fund will help you avoid dipping into your savings.
6. Start Cutting Costs
There are many saving strategies you can use to cut costs.
First, take a look at your expenses again. What subscriptions are you paying for? Choose a few subscriptions to cut.
For example, if you have YouTube TV, Hulu, Prime, and Netflix, remove one or two of these streaming services.
Make sure to turn off the “auto-renew” option on these subscriptions, too. Instead, look at your subscriptions every month. You might realize you’re using a few less often than you thought.
Start buying generic brands, too. These products can include your staple food items, makeup, and cleaning supplies.
Remain creative and keep finding new ways to start saving.
7. Repair and Restore
Do you throw out your clothes every time there’s a tiny rip or missing button? Don’t. Instead, start repairing and restoring your damaged possessions.
Learning how to repair and restore will help you save money. Otherwise, learn how to go without new clothes until you reach your saving goals.
8. Plan Meals for the Week
Do you eat out every week? You can grow your savings by cooking at home instead.
Make a menu for the week and stick with it. When you go shopping, only buy food with your menu in mind. Avoid impulse buying.
Make it a family affair or date night. Cook together and turn saving into a memory.
9. Reduce Energy
Is your energy bill getting too high? Look for ways to reduce your energy usage to save money.
For example, you can switch to energy-efficient appliances. Consider LED light bulbs and start taking shorter showers, too.
10. Get a Side Hustle
If you’re struggling to grow your savings after using these tips, get a side hustle!
For example, you can write blog posts online, deliver groceries, or put your unique skills to use. If you’ve learned how to repair clothes, offer your services to others!
A side hustle can help you accomplish your money saving goals faster than anticipated.
Money in the Bank: 10 Money Saving Strategies for 2021
Ready to put more money in the bank this year? Give these money saving strategies a try! With these tips, you can grow your savings and set yourself up for financial success.
Need help from the money saving professionals? We’re here to help.
Contact us today to discuss your financial goals with a member of our team.