Rid Yourself Of Credit Card Debt
This is the number one thing that you need to do if you want to start saving money. There is absolutely no point in saving money if you are paying 17 to 22 percent interest on debt. This is hundreds of dollars a year in interest payments that could be used to boost savings.
So, before you dive into saving money, get rid of that revolving credit debt. For best results, have a plan and pick a method like the Debt Snowball or Debt Avalanche method. One focuses on paying off low balance card first, which is motivating. The other focuses on paying off higher interest cards first, which is more efficient.
It is much easier to save money if you simply put it on auto pilot. If your employer allows you to split your check deposits, have a portion of your check automatically diverted to your savings. If you never see it, you can become accustomed to not having it.
If your employer does not allow for split payments, set up your checking account for automatic transfers. Ideally, this should be to a savings account that is separate from the bank where you have your main checking. This will keep your money safe from impulsive spending.
Healthy people are more productive and will ultimately have less medical expenses. In addition, all of our little vices normally come with a hefty price tag. This is particularly true for things like tobacco use and alcohol. Smoking is a prime example. If you smoke, quitting can easily put 200 dollars or more back into your pocket every month. That is over 2000 dollars a year.
Being healthy can also save you money in smaller amounts. Switch from soda to water or trade in unhealthy fast food meals for a brown bag from home. Things like this will not only allow you to save hundreds of dollars a year, they will also make you feel better, improving your quality of life.
It is easy to look for the big savings, but once you have made the big cuts, where do you turn. Turn to all of the little things that add up in a big way. That daily cup of “chain store” coffee might just cost 3 bucks, but that is over 1000 dollars over the course of a calendar year.
There are a lot of things like coffee that you buy which can add up big when you think about their annual cost. Things like buying a name brand versus a cheaper generic or purchasing bottled water over a reusable filter bottle. Even a dollar saved can have a big impact over time.
Open An Online Savings Account
There are several benefits to opening an online savings account. The chief one is that you will earn far more interest. In fact, you will likely earn over ten times the interest that you would from a local bank. Granted, this is still likely only about 1 to 1.5 percent, but when you are saving money, every dollar counts.
Another benefit that you might not think about is that it puts your money just a little further away from you. While you could get an instant transfer if you have a linked account from the same bank, an online account transfer would take a business day. This keeps your money accessible, but not too accessible.
Save Most Of A Windfall
If you receive a large amount of unexpected money, from a tax refund or work bonus, for example, save the majority of it. This is money that you did not expect and were not counting on to handle your regular expenses. That makes it a huge opportunity to boost your savings.
Let’s say that you get a 2000 dollar tax return. Take 10 percent and blow it on something fun, then take the other 1800 dollars and drop it into your savings account. You get to have a little treat and your savings gets a huge burst.
Make A Goal For Yourself
Last but not least, make yourself an attainable goal. Saving money requires sacrifice and sometimes it can be frustrating. Having an attainable goal can get you through the times that you are tempted to cheat on your savings plan.
The goal you set should be personal and it will likely be based on where you are in life, financially. It might be saving 1000 dollars or it could be reaching 100K. Whatever the case, make a goal and chart your progress.