It’s no secret that saving money can be challenging. Figuring out how much to save, and then putting a plan into place, isn’t a cakewalk. The truth is, you don’t need to have everything figured out to start saving. In this article, we share six ways to help you save money:
1. Review Your Expenses
To save money, you need to have a good understanding of your finances. You should know how much money is coming in and how you’re spending your income. To figure this out, start keeping track of your expenses. You can do this with a basic spreadsheet or with the help of a budgeting app. Simply connect your credit and debit card, and the app automatically analyzes your expenses.
Then make sure to categorize your expenses. For instance, your mortgage will fall under “essential expenses.” Your daily Starbucks coffee, on the other hand, is considered a “non-essential expense.” Once you have this information, determine what expenses to cut and allocate that money toward your savings.
Remember that you can always adjust how much money you’re saving. Today, you might determine it’s okay to put away $20 a week. But in a month, you may choose to increase or decrease that number. It’s important to remain flexible while trying to save money.
2. Add Savings to Your Budget
A great way to save money is to create a budget. Budgets get a bad rep, but they don’t have to be overly restrictive. While you want to cut back on your expenses, you should still be able to enjoy your life.
Thankfully, there are several budgeting methods available that help you save without sacrificing too much. For example, the 50/30/20 method. With this, you allocate 50% of your income to your essentials, 30% to your non-essentials, and 20% to savings. This ensures you’re saving and still living your life.
The pay-yourself-first budget is another popular option. Every time you get paid, you set aside a specific amount for your savings. You can then spend the rest of the money how you choose. What’s nice about this method is the flexibility.
As mentioned above, you may also use a budgeting app to help review your expenses and suggest a realistic budget. These apps allow you to quickly categorize your finances and set up a budgeting method that works for you. You can also easily monitor your progress within the app to help you stay on track toward your savings goals.
3. Automate Your Savings
Do you have a habit of forgetting to put money into your savings account? A great way to overcome that is by automating your savings and opening a high-yield savings account. Instead of manually moving money, automatic transfers do the work for you. You can set this up with your bank. Simply choose the amount or percentage you want to move from checking to savings, and schedule the frequency.
You might also talk to your employer and have a percentage of your paycheck automatically transferred to your savings account. Additionally, there are apps that will save on your behalf. Some let you set up the amount, and others determine one for you based on your income and expenses.
With an automatic savings plan, you don’t have to think twice about saving. All you need to do is sit back and watch your account grow.
4. Cancel Subscription Services
Spend some time going through all your current subscription services. Chances are, there are a few you no longer use — or don’t need. If that’s the case, consider canceling and saving yourself some money.
If you don’t want to completely give up a subscription, at least uncheck the auto-renewal option. This way, you aren’t paying when you don’t use the subscription. If you receive subscription boxes, this is especially helpful. Instead of opting to have it delivered once a month, you can order it when you need it.
There’s a chance you might even be paying for subscriptions you don’t know about. According to a Bankrate survey, about 51% of Americans ended up with unwanted subscriptions. It’s all too easy to forget you signed up for a free trial that’s now charging you a monthly fee. To avoid this, review your expenses and keep track of any new ones you sign up for.
5. Pay Down Debt
Having debt can make it difficult, if not impossible, to save money. That’s why it’s a good idea to focus your energy on paying down your debt. To start, categorize your debt based on interest rates. The higher the interest rate, the longer it will take to pay down. Because of this, consider tackling your debts with higher interest rates first.
With that said, some people prefer paying down debt with lower interest rates because they can do it quicker. Regardless of the process, paying down debt will free up money to start building your savings.
Keep in mind that this doesn’t mean you can’t save money while paying down debt. If possible, you should still do your best to allocate a small amount to your savings.
6. Adopt the 30-Day Rule
Have you heard of the 30-day rule? It’s a way to avoid overspending. Instead of immediately buying something that catches your eye, you wait 30 days. This ensures you have time to think about whether or not you need the item. There’s a good chance you might forget all about it. If not, you can feel better making the purchase knowing it wasn’t impulsive.
According to research, about 40% to 80% of purchases are the result of impulse buying. From this data, it’s clear just how much money you might be throwing away on a whim. Whether you’re having a bad day or being influenced by the media, it’s easy to spend without thinking. The 30-day rule helps you avoid falling victim to impulse buying so you can save that money.
Saving money shouldn’t be stressful. Instead of being overly restrictive, follow the easy steps above. Not only will these tips help you save money, but you’ll still be able to enjoy your life.