Savings can help you achieve any financial goal. Whether it's a comfortable retirement, a down payment for a house or a new car, you can get there by consistently setting money aside. And best of all, you can have what you want, without getting deep in debt. If you're like most people, you don't save as much as you'd like or you don't save at all.
Make Saving a Priority
You'll be more likely to save money, if you make it a priority. Sit down and figure out what you'd like to save money far: retirement, a house, car, an emergency fund, or college-and how much it will cost. Then make your plan:
- Set a timeline for when you'd like to reach your goal.
- Set a schedule, by dividing the total goal amount by the number of weeks, months or pay periods between now and your goal date.
- Be vigilant by treating your savings contribution just like any other must-pay expense, such as rent, mortgage or utilities.
Pay Yourself First
You're probably inclined to pay everyone else first, whether it's your landlord, your mortgage company or your utility company. But it's so important to start paying yourself first by saving money. Use an automatic payroll deduction-it's easy!
Once you've made a contribution to your own financial well-being, then you can divide up your money to cover everything else. If you are a smart consumer, you'll more than likely have enough left over to cover everything you need.
Find Money to Save
It can seem difficult sometimes just to make ends meet, but changes are you have extra money you didn't even know about. Here are some ways to find it:
- Keep track of everything you send for a week. You might be surprised what you're buying and what you can do without.
- Make more purchases with cash, less with credit. This can help you stick to a budget and avoid impulse purchases. Simply decide ahead of time how much you want to spend and then set aside an amount in cash before you go shopping.
- Lower some bills. Some creditors will consider lowering the interest rate, if they are asked. Also, conserving energy (heating, cooling, electricity and water) can make a big difference. Cancel services you don't need. Shop smart. Understand that saving $15 each week adds up to over $750 annually.
- Rank your non-essential (or flexible) expenses. Keep the ones you like best and cut the items on the bottom of the list you really don't need or use any longer.
- Watch your food expenses. Pack a lunch. Cook more dinners at home. Dining out uses up a lot of money that could be saved.
- Don't try to keep up with the "Jones'". Live your own life. Don't follow other's lead. Constant stress because of finances is a red flag that you are living beyond your means.
One of the first steps to help make saving a priority is budgeting. As unpleasant as it may sound, creating a budget is nothing more than examining your income and monthly expenses in order to determine exactly how much money you have coming in and where you're spending that money. Once you've got a clear understanding of your current budget, our challenge is to find places where you can spend less or earn more to help you achieve you financial goals.
Now that you've reviewed the tips above, choose one or two that you think may work for you and give it a try. After a month or so, see if you can try to find one or two more. Continue to do that until you find the system that works best for you.