Saving money is important for a whole host of reasons.
For one, It can enable you to afford large expenses (such as a vacation or new flat screen TV) without running up high interest credit card debt.
For another, it can provide the peace of mind that comes with knowing you can get through a rough spot without hardship.
Having a financial cushion can also give you options, such as the ability to leave a job you dislike without waiting to get another one. And, it can help you to take the best possible care of yourself and your family.
Even if you feel you don’t earn enough to put anything away, having a well-organized budget can help you find ways to cover necessities, some fun, as well as a little bit of saving.
Saving money doesn’t have to feel hard, either. There are plenty of easy, fairly painless ways to build a simple savings plan–and you don’t have to do them all.
Here are some simple ways to save money each month.
Tracking Your Weekly Spending
Looking at your spending on a weekly basis can feel more manageable than trying to keep track of a month’s worth of spending at a time.
That’s not to say that you shouldn’t budget on a monthly basis, but breaking your timeline into smaller segments can simplify the process.
You can track spending (including every cash/debit/credit card transaction and every bill you pay) by using an app, jotting down every purchase, or collecting all of your receipts and writing it all down later.
You might then set a certain day of the week to look over the week’s spending. This can be an enlightening exercise. Because spending can be so frictionless these days, many of us don’t have a real sense of how much we are actually spending on a day-to-day basis.
Just seeing it all laid out in black and white can immediately make you think twice before you buy something nonessential and inspire you to become more intentional with every dollar.
Creating a Simple Budget
Once you’ve mastered tracking your cash flow, and have a good idea as to your spending habits, you may want to take it one step further and set up a simple budget.
A budget is nothing more than setting limits for spending in different categories. To get started, you’ll want to list all of your monthly expenses, grouping them into categories, such as groceries, rent, utilities, clothing, etc.
If your goal is to save some money every month, you’re going to want to set a budget for yourself that includes an allocation to saving.
Next, you may want to tally up all of the income you’re taking home each month (after taxes), and see how your monthly spending and monthly income compare.
If spending (including putting some money towards savings) exceeds income, the next step is to look at all your expenses, find places where you can cut back, and then give yourself some spending parameters to stick to each week.
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Automating savings is a great way to remove a huge barrier to saving — forgetting to put that money aside, then ultimately spending it.
The reality is, we all live busy lives and while we may have every intention of saving money, it often doesn’t happen without a plan.
Automating is an easy way to save money without ever having to think about it.
The idea is to have money moved from a checking account and into a savings account on the same day each month, perhaps soon after your paycheck is deposited.
This way, the money is whisked from the checking account before it can be spent elsewhere.
If you are new to automating or have an irregular income, it’s okay to start with smaller dollar amounts. Likely, you won’t even notice that the money is gone from your account, and you’ll be able to increase that amount over time.
You can set up automatic transfers to your savings, retirement, and other investing accounts.
Planning Your Groceries
An easy way to save money on groceries is to make a meal plan and a shopping list before you go to the store.
Without a list, you may be tempted to buy things that look good but that you don’t need or can’t use. Plus, you may end up having to go back to the store later, where you may be tempted to buy more things.
You don’t have to be a pro at meal-planning. It can be as simple as picking a few recipes that you want to make throughout the week (making large enough portions to provide for leftovers is another way to save).
You can then write a list of the ingredients that you’ll need, making sure to check your cabinets and use what you have first.
You may also want to list exactly what snacks and/or desserts you plan to buy, so you’re not overly tempted once you get to the chips or cookies aisle.
Another way to save money on groceries is to cut back on pricier items, such as meat and alcohol, and to go with store or generic brands whenever possible.
Negotiating Your Bills
Some of those recurring bills (such as cable, car insurance, and cell phone) aren’t carved in stone.
Sometimes you can get a lower rate just by calling up and asking, particularly if the provider is in a competitive market.
Before calling, you may want to do a little research and know exactly what you are getting, how much you are paying, and what the competition is charging. You may also want to get competing quotes.
Even a small reduction in a monthly bill can save significant cash by the end of the year.
If you are experiencing hardship, you may also be able to negotiate down your electric and/or other utility bills by calling and explaining your circumstances. It never hurts to ask.
Actively Paying Down Credit Cards
This might sound more like spending than saving, but if you’re currently only paying the minimum on your credit cards, a big chunk of your payment is likely going towards interest. Chipping away at the principal can feel like a tall mountain to climb.
If possible, consider putting more than the minimum payment towards your bill each month. The faster those credit cards are paid off, the faster you can reallocate money that was going out the window–and into interest–into savings.
It can be all-too easy for money to leak out of your account due to sneaky subscriptions.
From unused gym memberships to shopping subscription programs to streaming services and cable television, subscription bills (even small ones) can rack up quickly because they come every single month without fail.
The first step is to cancel any of which no longer serve you. Try to be honest with yourself–are you likely to start going to the gym?
If you’re looking to save money faster, you might consider making a sacrifice on a subscription that you do enjoy. For example, maybe you pay for Netflix, Hulu, and Disney+. Is it possible to use just one or two, instead of three?
Renewing Your Library Card
If you’re a reader and love books, one fun way to save money is to dig out your library card, or if you don’t have one, stop in to apply for a card.
The library can be a great resource for more than books. For example, you can often access magazines, newspapers, DVDs, music, as well as free passes to local museums.
These days, you can typically get many of the benefits of being a card-holder without ever actually going to a branch. You can often get audio books and e-books, as well as access to online publications, all from your computer or phone. Cost: Zero.
Shopping for Quality
Buying well-made, durable items instead of cheap, trendy, or single-use items may mean spending a little more up front.
But this can be a shrewd money move that can save you a bundle over the long run because you won’t have to repeatedly make the same purchases.
Buying a few classic, well-made pieces of clothing you will wear for a few years, for example, can end up costing less than picking up eight or ten cheaper, trendier items that you’ll end up replacing next year.
It may also pay off to spend a little more for appliances that are known for being reliable and lasting a long time and have great customer reviews, than buying the cheapest option.
Shopping for quality takes some education and practice, but it can be a worthwhile skill that your wallet will appreciate.
Pressing Pause on Big Purchases
Making impulse purchases can wreck a budget. That’s why if you’re tempted to buy an expensive item that is more of a “want” than a “need,” you may want to give yourself some breathing room, and allow the initial rush to wear off.
For example, you might tell yourself that you’ll wait 30 days and if, after the waiting period is over, you still want the item, you can get it then.
During that time you may lose interest in the item. If, however, you still want it in a month, that’s a good sign that this purchase will add substantial value to your life, and isn’t just a fleeting desire. If you can make room for purchase in your budget, then go for it.
This helps you make spending decisions from a slower, more thoughtful place, and can be a huge help in learning to budget and save money.
Finding a Good Place to Grow Your Savings
Even if you’re only putting a small amount of money into savings each month, over time, that account will grow.
One way to help it grow faster is to park the money in a place where you won’t accidentally spend it, and where it can earn more interest than a typical savings account.
You might consider opening up a high interest savings account, money market account, online savings account, or a cash management account.
You may find that separating your savings, and watching it grow, keeps you motivated to save.
In some cases, you may be able to create “buckets” within your account, and even give them fun names, such as “Sushi Tour in Japan” or “My Dream House” that can help keep you motivated.
Saving may not seem nearly as fun as spending, but it can give you the things you ultimately want, whether that’s financial security, a downpayment on a new home, or a comfortable retirement.
And, there are plenty of ways to save money that don’t require sacrifice. Sometimes, all it takes to get going is to become aware of your finances and spending habits.
You can then use a mix of short-term strategies (like spending less every time you go to the supermarket) and long-term moves (like paying down debt and buying higher quality goods).
One easy way to manage your spending and saving is to sign up for a checking and savings account with SoFi.
With SoFi Checking and Savings, you can easily see your weekly spending on your dashboard in the app, which can help you stay on top of what you are spending and make sure you are on track with your budget.
SoFi Checking and Savings also offers a Vaults feature, which allows you to separate your spending from your savings (and even create different Vaults for different goals), while still earning competitive interest on all your money.
Vaults also allow you to set up recurring, automatic deposits.
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