Like exercise, saving money is one of those things far too many of us never get around to doing. Often, it isn't until we have an unexpected expense or we start looking towards retirement that we realize we should have been more proactive. Creating personal savings is imperative for your long-term financial stability, and, if there’s anything these last couple of years have shown us, it’s that we can’t predict the future.
Where to begin?
Before you can move forward, you need to look back. Analyze your spending habits. List all of your fixed expenses (like your mortgage, utility bills, insurance fees) and your variable expenses (like streaming services, phone bills and entertainment) and see what you’re truly spending every month. Once you have an honest assessment of your spending, you’ll be able to see how your cashflow is affected and what money is left for savings.
Make a plan and then make it a habit
The path to better financial health and increasing your savings can sometimes start with tools like online calculators to help you plan and prioritize your spending and savings. Successful saving is a habit. Once you start in on it, it will become second nature.
Make savings automatic
Pay yourself before you pay anyone else. That means setting up your banking to automatically transfer a pre-determined amount from your account, and direct them into another account or savings tool so that you don’t even have the opportunity to spend those funds. Out of sight, out of mind.
Revisit your recurring bills
Look at your recurring bills and utilities and call them to see what options you have to reduce your bill. Many companies will offer lower rates or alternatives just because you ask.
Reduce your expenses
You might not think you make enough money to save anything at all, but you’d be surprised how much wiggle room you have in your daily life to reduce your expenses and increase your ability to save.
Credit card interest can be a savings-killer. Use any extra money you have to reduce credit card debt. Your savings can grow that much faster if you're not paying interest.
Triage your streaming needs
This is a simple yet challenging thing for most people to do. We are, after all, creatures of habit. But really, how many streaming services do you need? Take an audit of all the individual subscriptions you have – even if they only cost a few dollars per month. It all adds up.
Find savings at the grocery store
Most people spend around 10% of their income on food. There are some small but significant ways to maximize your shopping budget. Make a list and stick to it. Bonus points for meal planning in advance so that you don’t buy produce and other perishables that will go bad before you eat them.
Consider buying in bulk, purchasing in-season fruit and vegetables and switching from branded to no name products.
No one likes being stuck behind the price matcher in the checkout aisle, but they are spending less on the same items because they took the time to research more affordable prices. There are apps that make it easy to price match. You can impress the person behind you in line with how little time it actually takes to save real money.
Don’t buy things you already own
Your financial security requires you to review your habits and find ways to reduce spending wherever you are able. Do you really need to upgrade your perfectly good phone? Does your couch really need to be replaced? Asking yourself ‘do I really need this?’ is a good way to gut-check your needs versus your wants and will help reduce unnecessary spending.
There is no time like the present, to start saving for your short-term goals and long-term financial stability. If you're not sure about how to save for bigger financial goals, connect with one of our specialists. Do you want to go on a big trip in the next few years? Retire early? Give us a call and we will help you create a plan and save your money to meet your financial goals.