Savings can help you cover expenses like unexpected costs, medical bills and a down payment on a home. It can also help you stay out of debt.
Start small by automating your savings. Putting away even just $50 a month will make a big difference over time. Other simple ways to save include using the 24-hour rule to prevent impulse purchases and cutting back on food and clothing expenses.
1. Set up automatic transfers to your savings account
One of the most effective ways to save money is to put it on autopilot. Having savings automatically deposited from your paycheck or recurring transfers to your account can help you stay on track and reach your goals more quickly.
If your employer offers direct deposit, you can use this option to have a small portion of each paycheck directly deposited into a separate savings account or designated emergency fund. Then the rest of your paycheck can be deposited into your checking account to cover expenses and bills.
Having the cash saved automatically can help keep it out of your hands and prevent you from spending it on impulse purchases. Once you get a feel for how much you can spare each paycheck, you can increase the amount or the frequency of your automatic savings to match your budget and savings objectives.
In addition to recurring transfer options, some banks offer round-up savings programs that can also help you keep the extra change out of your wallet. This works by automatically rounding the purchase price of each transaction to the nearest dollar amount and then transferring the difference to your savings or investment account. In a similar vein, many apps and programs allow you to automatically deposit the rewards balance from your credit card into a separate savings account, where it can earn interest.
You can also take advantage of the free, easy-to-use tools available to you through Global Credit Union. Our mobile app and online banking make it simple to set up a Steady Save plan that will automatically transfer a predetermined amount from your checking into your savings each month.
If you’re using an automated transfer to build your savings, it’s important to check in on it periodically to ensure your funds are being properly deposited and that you’re meeting your goal amounts. Also be aware that some accounts may have a maximum number of withdrawals per month or limit how frequently you can transfer money in order to avoid incurring fees.
Many people find it easier to stick to saving and budgeting goals when they can see tangible results of their efforts. To give yourself a visual boost, consider tracking your progress on a spreadsheet or an app. There are plenty of options for budgeting and savings apps that let you create customized charts to see your progress in real-time.휴대폰 결제 현금화
2. Make a monthly budget
A budget is an essential tool to help you manage your money and save. You’ll want to list all your monthly expenses, including fixed bills like rent and car payments, as well as variable expenses, such as food and entertainment. You can use a budgeting app, software or simply pen and paper to compile your list of spending. Make sure you include all your expenses, even the small stuff that adds up to a significant amount over time, such as buying a $4 coffee every day or eating out several times a week.
Once you’ve compiled a list of your spending, you can separate it into categories of needs and wants. This will help you determine how much you can save each month.
You can also break down the costs into a specific dollar amount, such as the cost of gas for your car or the monthly subscription fee for an online streaming service. This will allow you to see how each expense can be reduced or eliminated to free up more money for savings.
It’s also important to distinguish between the things you need, such as your mortgage or insurance, and the things you want, such as a new pair of sneakers or that fancy new terrarium for your goldfish. You may find that you can save a lot by eliminating the subscriptions and services you don’t need, or even by cutting down on how much you spend on groceries.
Once you have a complete list of your monthly expenses, subtract your total spending from your net income. This will show you how much you can set aside each month for saving and other financial goals.
Once you’ve created a budget, it’s important to stick with it. You can do this by tracking your spending regularly, assessing your progress and making adjustments as needed. If you’re struggling to stay on track, there are plenty of apps that can help, such as N26 Spaces, which allows users to create sub-accounts for different goals. By making a commitment to stick with your budget, you can start to build a strong foundation for your finances that will support your future goals.
3. Pay off your debt
As you work to pay off debt, it’s also important not to neglect other financial goals. You’ll need to build an emergency savings fund, for example, and you may want to save for a larger goal like a down payment on a home or retirement. It’s possible to do all of these things without sacrificing your ability to pay off debt, but it requires a bit of planning and discipline.
Start by calculating your baseline budget, which includes the minimum monthly payments on your debts and your essential costs such as housing, utilities, food and transportation. This gives you a clear picture of your financial situation and how much discretionary income you have.
Then subtract your baseline costs from your take-home pay to determine how much of your income you can allocate toward debt repayment each month. This will help you prioritize what’s most important to you and keep you motivated to make progress.
Whether you’re struggling to pay off credit card debt or student loans, there are plenty of strategies that can help you lighten your load. Some strategies, such as the debt snowball and debt avalanche methods, focus on paying off smaller debts first, which can provide quick wins that inspire you to continue your journey. Others, such as refinancing your mortgage or taking advantage of loan deferment and forbearance, can help you find a better rate and reduce the total amount you’re paying in interest.
Finally, it’s always a good idea to avoid unnecessary spending and cut back on luxuries. This can include skipping Happy Hour, eating at home more often and not buying new clothes just because they’re on sale. You can also use cash instead of cards when shopping to eliminate the temptation to buy things you don’t need and curb impulse buying.
It’s also a great idea to celebrate milestones as you work toward your debt repayment goals. This could include treating yourself to a night out with friends after you meet your debt repayment goals or celebrating a big achievement like graduating from college. This type of reward will help keep you motivated and remind you that the long road to being debt-free is well worth it.
4. Start saving
One of the best ways to get into a savings habit is to set aside money automatically. Whether that means setting up recurring transfers through your bank or credit union, or simply putting cash in an envelope each payday, making this a regular habit will help you build up your savings over time.
Another important step is to create a budget. This will help you see how much you spend compared to your income, so that you can identify areas where you can cut back or make changes. Start by listing your monthly expenses and comparing them to your income, including debt payments, utility bills and savings contributions.
Be sure to include any expenses that occur less often, such as car maintenance or home improvements. Also consider adding an emergency fund to your budget. You should aim to save at least 15 to 20 percent of your income.
Once you have a budget in place, try to stick with it. It can be helpful to have a goal in mind for your savings, such as a vacation or a new car. This will give you something to work towards and help keep you motivated.
Lastly, remember to avoid dipping into your savings for non-emergency purchases. To do this, try the 30-day rule before making any significant purchase. This will help keep the impulsive part of your brain in check by giving you more time to think about whether or not the item is really worth it.
Other good saving tips can include eliminating nonessential spending, such as avoiding that $4 mocha latte or skipping the fancy dinner outing. It’s also a good idea to shop around for the best deal on things like cell phone plans, home Internet services and cable television packages.
Finally, if you’re on a low income, look into your local Investment Development Account (IDA) programs. Many of these have matching funds to help people save for a home, education or small business.