8 Ways To Save Money
When it comes to knowing how to budget and save money, many people have trouble finding ways to cut costs or curb spending. It’s tough putting aside dollars from your hard-earned paycheck, especially when there are so many things to spend it on. However, saving for the future should always be your priority. Here are eight simple ways you can save money today:
1. Set A Goal
Before you start saving it’s important to set a goal. Saving money is often easier when you have something to work towards. Your goal should be measurable and, most importantly, realistic. It’s good to want to save more money. Just make sure you don’t set the bar too high with an unattainable goal that will only set you up for failure. Additionally, assigning a purpose to your savings may help motivate you. Consider saving three months of income for an emergency fund for job-loss security or medical expenses. You can also save for more rewarding reasons, like a vacation or new home. Whatever your goal, make sure it’s clearly defined and that you stick to it.
2. Check Your Credit Report
Another simple way to save money that is often overlooked involves checking your credit report. Your credit report provides a full picture of your financial health including the debts and credit accounts that exist under your name. Before you make a budget, it’s important to identify your outstanding debts to determine what percentage of your finances will go towards paying them. This may prevent any unexpected expenses down the road that will stop you from contributing to your savings. You can request your credit report from any of the three main credit bureaus, including TransUnion, Experian, and Equifax.
3. Make A Plan
In order to reach your savings goals, you need to make a plan. This usually starts with a budget. Use the debt information on your credit report and your monthly expenses to determine how much of your paycheck you’re likely to spend down to the last cent. Factor in food, utilities, transportation, and other living expenses. Give your savings the same priority as your necessary monthly payments and try setting a specific amount to put aside each week. Only after you’ve hit this goal should you spend money on entertainment purposes or other inessential costs throughout the month.
4. Choose A Savings Account Carefully
It may seem obvious, but choosing the right savings account plays a big part in saving more money. Shop around for banks, comparing interest rates for each of their savings accounts. Check to see if there are any promotions or incentives available for opening a new account that will help kickstart your savings. Most importantly, understand the fees associated with your account and take them into consideration when making your final decision. The last thing you want to do is open a savings account that costs you more money than you’re saving.
5. Set Up Automatic Deposit
Talk to your employer or bank about setting up automatic deposits. You can usually choose to have a percentage of your paycheck divided between your checking and savings accounts. Additionally, most banks have the option to create recurring monthly transfers of fixed amounts from your checking account to your savings. Automatic deposits create fewer opportunities for you to accidentally spend the money or second guess your savings. It also takes the work out of remembering to contribute to your savings account because the bank does it for you.
6. Save Every Cent
Pennies, nickels, dimes, and quarters all count in the long run. Keep coins separate from your spendable cash and instead put them in a jar. Every time you receive change when you shop, add those coins to your jar. At the end of the month, deposit your change directly into your savings account. Go even further by applying this same tactic to one dollar bills. Whenever you get change for a five or ten dollar bill, add the singles to your jar.
7. Reduce Spending
One of the most simple ways to save money is learning how to cut costs and reduce spending. Your budget will help you decide which of your expenses need to be trimmed. Take a close look at the amount you’re spending on groceries, utilities, and clothing. Sometimes even small changes like buying generic brands, turning the lights off when you leave a room, or skipping a shopping day can lead to big savings over the period of a month. Take the extra money you normally would have spent and instead add that to your savings.
8. Check Progress
There are many ways to save money, but you may want to check your progress to make sure they’re working. Set aside time on a weekly or monthly basis to review your budget and savings. This will allow you to improve in areas that you’re not saving as much as you’d like, and help make additional cuts to costs where needed. It will also encourage you to stay on track with your goals. If it seems like you’re still short, try a new tactic. Remember, saving isn’t exactly a science and it doesn’t happen overnight. However, with some hard work and effort you may start seeing a difference in your saving habits.
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What You Need to Know:
There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The credit score you receive is based on the VantageScore 3.0 model and may not be the credit score model used by your lender.
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