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The New Year is the best way to declare your savings goals. Especially now, in the midst of the pandemic, the financial trend led to saving money instead of spending. In April 2020, the personal savings rate in the US jumped to 33.7% which is a huge jump in comparison to 2019's 7.6%.
This year is the best time, more than ever, to continue on this goal. After all, there are so many ways to save money, and mastering money management is something your future self will thank you for.
Your future indeed depends on what you do today. The same is true with financial management, which must be prioritized now to feel comfortable in the years ahead. To start, here are some of the best ways to save money so you can work towards your financial goals right away.
One of the best things to start with is creating a savings plan. Planning must be the first step because as they say, a goal without a plan is just a wish. Think about what you want to get and what your savings will be for.
For a plan to work, you have to reflect and be honest with how much you spend money. To get started, follow this powerful formula: income less savings equals expenses. Again, savings will be the priority before you budget what's left for your living expenses.
One common mistake many people commit is not having a record of the cash that goes out. If you don’t know where your money went, you will not be able to monitor what to control. For instance, you should take down your home costs, including food, water, cell phone, internet, and entertainment.
You should try your hardest to keep receipts, bills, and credit card and bank statements to tangibly work out where your money goes.
If you think about it, the best way to save is to keep your money in a place where it will generate additional earnings for you. That is possible when you choose to open a high yield savings account. This way, the few hundred dollars you start within your bank account will give you some returns in the long run.
If there's one piece of advice you can get from 2020, it is that life is unpredictable. People tend to live in the moment and forget to think long term. What we can do instead is to take advantage of current opportunities in building a fund for emergencies.
The suggested emergency fund value must be six months' worth of income. If that's a little overwhelming for you, most expert tips suggest starting small and building from there.
The interest rates that pile up with unpaid credit card charges are no joke. If you do not have much money in the first place, do not allow yourself to add more debt by missing payments. Paying early and on time will ensure your card is maintained. Even better, you can connect an auto payment through your debit card, so you will never miss deadlines and your credit score will remain intact.
If you are way too busy with work or school, earning is still possible even without much effort. Be open to passive earning opportunities to build your wealth. This can start with simple things like blogging, renting out assets, affiliate marketing, investments, and dividends.
Another great money-saving tip to follow is to consolidate your loans. There are credit companies that can bring the balance of your student loans, credit cards, and other debt in one place. By doing this, you can save money because of the lower interest rates and have less trouble thinking of deadlines.
Have you ever noticed that most of your budget goes to grocery spending? If you don’t have a list when you go to the supermarket, you will only end up buying more products. Try to organize your orders by categories and keep yourself within the budget.
If you think about it, the easiest way to save money is to change your lifestyle. Most of a person's money goes to impulsive purchases like fast food, cigarettes, junk food, or alcohol. Sometimes, money is wasted on a gym membership that is not really used or surrendering to retail therapy, which you'll regret when the statements for your credit cards come.
It is human nature to get involved more in a goal when a competition or a challenge is factored in. If you want an additional drive to make you want to save more, join a challenge that will make the journey much more enjoyable.
This is a simple rule that helps you before you proceed with an unplanned impulse purchase. All you need to do is deposit your money to your bank account for 30 days instead. After 30 days, you decide if you still want to continue with the purchase or let the money stay in savings.
The first thing you can do to save $1,000 is to cut back on spending. For instance, cut out the unnecessary habits like online shopping. Stick to a discipline of only spending on things you need in your life. Always set an amount for spending and saving, and commit to that value.
Every time you want to buy something, think wisely. Follow your budget. Don’t get tempted by the idea of having a product that you don’t need at all. Remember the reason behind your decision to save and remind yourself that it will all be worth it in the end.
The road towards saving money is not rocket science. Even with small steps, you can create big changes in your life. At the end of it all, you have to make sure that you keep your goals in mind and that you are determined to commit to them.
In your journey towards better financial management, AnyCredit can help you make better decisions. Contact AnyCredit today for savings tips and credit advice!