There’s so much conflicting financial advice floating around about the best ways to save. Below, you’ll find 10 tried-and-true tips for saving money. Start with these and you’ll be well on your way to achieving your long-term financial goals.
Track What You Spend
The first step to saving money is knowing exactly what your expenses are every month. Do you know how much you spend month-to-month? Many people simply have no idea. That mindset could be costing you. So, instead of guessing, track your money. Start by recording all your regular expenses, including housing, food, utilities, insurance, childcare, entertainment, and more. When you compare those expenses to your income, you’ll get a clear picture of your budget. Make savings an expense category in your monthly budget. Every month, put aside a set amount of money into a savings account. If you find that you don’t have room in your budget to do this, you may need to go back and review your budget and see where you can limit your spending.
Control Your Credit Cards
Nothing drains your money as fast as high-interest debt. With interest rates above 15%, credit cards can get you into a deep financial hole quickly if left unchecked. Whenever possible, pay off your credit card balance in full every month. If you feel overwhelmed by your credit card debt, you may want to consider a lower-interest loan to pay it off. Carrying debt on your credit card could mean losing out on money you could be saving elsewhere.
When you decide how much money you can afford to save each month, set up an automatic transfer between your checking and savings accounts. For example, if you know you want to save $200 a month, you can schedule an automatic transfer of $200 from checking to savings on the first of the month through your online banking account. The idea being, if you don’t see it in your checking account, you may be less tempted to spend it.The less you have to think about saving, the easier it becomes.
The 20 Percent Solution
A tip that you could try is to save 20% of your pre-tax annual income. So, if you make $50,000 a year before taxes, your goal should be to save $10,000. Remember, that’s just a target. It’s important to look at your entire budget, and see what fits your personal situation. The goal is to save as much as you can, and any amount saved will ultimately help you reach your goals.
Do you buy lunch at work every day? Do you go out to eat several times a week? The cost of those meals adds up! You can spend a lot less on your meals by cooking at home. It may even be healthier too!
Trim Your Subscriptions
Do you subscribe to lots of different services for entertainment? Be honest. How many do you really need? If you have multiple bills for streaming television shows, music or movies, you might want to take a closer look at what you truly need. Those bills can get out of hand before you know it. Save money by trimming what you don’t need. Then, see if you can bundle services for less money. You can also try subscribing to one service and cancel as soon as you’re all caught up on the content.
Make Your Match
A lot of employers typically offer a retirement account benefit, such as a 401(k), and chances are they match at least some of your contributions. If you can afford it, try to contribute enough to get the maximum match from your employer. That’s additional pre-tax money going directly towards your savings – like a hidden raise!
Save Unexpected Cash
Windfalls are exciting, but don’t spend them all in one place! Tax refunds, casino winnings, or money you inherit can be an instant boost to your savings. When you get a sudden cash infusion you weren’t expecting, direct a major portion of it into your savings account. Depending on the amount of money you receive, consider consulting a financial advisor to see what other options are available to you.
Refinance Your Mortgage
When interest rates are low, homeowners could save hundreds of dollars a month by refinancing. That money could be going directly into your savings account instead. Many experts say it’s worth refinancing if you can lower your rate by at least 1%. Meet with a mortgage professional to see if refinancing could help you save each month.
Today, we are fortunate enough to have technology at our fingertips to help us manage our finances. There are easy-to-use mobile apps that can help you budget, save, and plan for the future. If you have online banking with BayCoast, you can use our Money Management tool to help with your budgeting to get a clear picture of your finances.