Getting started is the hardest part of saving money unless you have it to save. While keeping the money from your sale try to at least save 20% of your income is ideal, more often than not, this can be difficult. Bills, living expenses, and emergencies can eat up your spare income, but here are five practical tips to get started on saving money.
Establish a budgeting plan. This involves writing down everything that you spend money on. Even something small like your daily coffee can add up each month. Once you have the expenses written, organize them into their categories. If you primarily use your credit or debit card, your online portal can often do this for you.
Once you have your expenses organized, you can establish a budgeting plan on specific categories. You’ll find that some items can be cut out of the budget or setting a spending cap on a group so that you can save money each month.
Save loose change & extra money. Whenever you have spare change from a restaurant or drive-thru, you can throw the money into a jar. While this won’t instantly increase your savings, it will grow over time without you noticing.
If you always use a credit or debit card, another way to save loose change & extra money is to make extra money from your paycheck and deposit it into your savings account.
Another way to save money is to pay off high-interest credit cards. Select the card with the highest interest rate, and focus on paying off that debt first. Once you have the card paid off, you can use that money to pay off the next highest. After you pay off high-interest credit cards, you can use that money for savings.
One of the best tips for saving money is to automate it. Many banks offer automated transfers where you can set up an amount to transfer and when. Once you set up the automated transfer, you don’t have to think about it, and it reduces the temptation to use the money on something else.
Some companies also offer payroll splitting that works similarly. You can choose to split the paycheck in percentages or set a specific dollar amount sent to each. This can be helpful if payroll dates are irregular for automated bank transfers.
The last and maybe most important tip for saving is to set a financial goal. It’s a good idea to set both short and long-term goals. Sit down and be specific. If you want to save a down payment for a new home, check to see how much is needed. Once you have an amount, you can see how much you need to save each month from reaching that goal.
Whatever reason you have to save money, stay focused. Each of these tips used together can help you get past the hardest part of saving.