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Despite your best efforts and intentions, sometimes bills pile up, emergencies happen and it can feel impossible to save enough to make a difference. Thankfully, with some tweaks to your finances and the help of a few tools, building up your savings doesn’t need to be painful with this guide on how to save money.
Saving doesn’t mean that you have to give up on the good things in life. While some sacrifices are necessary, a proper balance between spending and saving will result in extra money for you and greater financial security for your family.
Start off with a few short-term goals, then develop those into long-term goals. Set goals that are easily achievable to start saving responsibly, then move on to goals like saving for a car or a down payment on a home.
One of the easiest ways to save money is to never see it first. Divert a portion of your paycheck automatically into an account that’s not tempting to access. Some suggestions are:
One of the biggest downfalls is using more money than you have. Live within your means and avoid borrowing whenever possible to stay financially healthy.
Create a habit of setting aside money in regular intervals. Even small amounts set aside habitually can create a comfortable nest egg for you. Automated tools like Digit, which calculates how much you can afford to save and moves money to your savings when you can afford it, make saving easier.
Decide on a portion of earnings that you’d like to manually deposit into a savings account each month — and make sure you stick with it.
You can’t plan for everything in life, but you can save for a financially stable future. Working on long-term goals as soon as possible will help you have a smoother financial path down the road. A few ways to do that are to:
You can plan to retire. You can plan for tax season. You can even plan for death — but you can’t plan for everything. You can, however, take steps to prepare yourself for the unexpected so you don’t get permanently knocked down when you hit an obstacle.
Unexpected medical bills, losing your job, a house fire, a broken car, a last-minute plane ticket to see a sick relative — there are endless potential emergencies that could crop up and eat into your savings. If you don’t have enough to cover those emergencies, you could end up with overdue bills and plummeting credit.
Make sure you have enough to cover any emergency that might come up — enough to live on for nine months is recommended, but if that’s not possible, do what you can.
Small amounts of debt are unavoidable — like a mortgage or that bit of credit card debt that carries you over until payday. Once debt starts piling up, though, it can be hard to dig yourself out. If you can avoid going deeper into debt, like deciding not to take that personal loan to go on a vacation, do so.
Try and master the 30-day rule, which challenges you to wait 30 days before making a purchase. Often, you’ll find that if you wait a month to buy something, that urge will have dissipated by then and you’ll save money.
Try and make more than the minimum monthly payments. Since interest is calculated based on your daily amount, the faster you can reduce your principal, the less you have to pay.
The cost of health care in the US is astronomical, and a simple ER visit can cost thousands. Without health insurance, a serious illness or injury can costs tens or hundreds of thousands. If you’re having trouble avoiding premiums, look into government assistance in your state.
One of the most important tips for saving money is to know where your money is going. If you don’t stay on top of your finances, small purchases can eat away at your checking account, leaving you with nothing left to save and no idea where the money went. Here’s how to keep your finances healthy:
Many financial companies and banks give you the option to borrow from them. Credit cards are there to pay for goods or services and you can take out loans for bigger purchases like cars, homes and even a start-up fund for your business.
The downside of credit and loans are the charges that come along with them. Your monthly payment comes with interest, which can add up over time — especially if you miss a payment and end up needing to pay late fees.
If you struggle to keep your credit card spending under control, consider using the card for emergencies only and carry cash on you for day-to-day purchases until you get used to sticking to a budget.
While there’s a degree of risk involved, making smart investments can help you grow your money significantly. A few of your many options are:
Saving can be difficult, especially when you think about how much it costs to make a big purchase or even retire. However, taking small steps to stash money away in a savings account every month can start to add up to major savings after a few years. If you make smart financial decisions and turn budgeting and saving into a habit, future you will be grateful.
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