We're all trying to save money in our daily routine. Far too often we overextend and have nothing left to dig our way out of emergency situations that require a sudden expenditure of cash. The truth is, 70% of Americans don’t have $1,000 put away in an easily accessible savings account to cover emergencies or lapses in cash flow.
Finding powerful areas to generate savings and additional financial security is therefore an essential part of creating financial health for the long term so that you and your family can live with peace of mind and financial security long into the future.
1. Start saving today.
Saving, even a small amount, is the backbone of financial security. What many people don’t realize about saving is that it starts with, and subsequently reinforces, a strong budgeting habit. The best thing you can do for your finances is to simply start saving. This could be through a rounding up function with your current bank or a dedicated transfer at the end of each week.
With the rounding option, you can set your purchases with many major banks so that each time your debit card is used to make a purchase, the bank automatically rounds this amount to the next dollar and transfers the difference into your savings account for you.
This is a great option for those who think saving is a rich man’s game. Many users of this function are shocked when their round-ups begin to accumulate serious cash that can be directed into specific savings pots or left alone to accumulate interest in a general savings account.
Alternatively, budgeting per week, rather than monthly, gives those with weak cash flow the opportunity to really determine where they're sinking most of their money and make immediate adjustments that can really their savings game.
Reevaluating your spending habits on a weekly basis gives you the ability to direct excess cash into a savings vehicle and incentivizes larger surpluses more often than other strategies.
Saving quickly becomes addictive, and each week's excess will end up competing with the prior week's before you know it. This strategy can help you grow your savings account to a level you previously thought impossible in a matter of months.
Saving is the linchpin of a high-quality budget. It creates the additional daylight that any individual needs in order to find long term financial success because no life strictly follows the budget guidelines that we set. Everyone sees a tire blowout, a sports injury, a vet visit, or a necessary computer or phone repair.
These emergencies are by nature unforeseen and therefore can’t be budgeted for. However, saving now for payouts that will occur in the future is the best way to get ahead so that, in the event of an emergency, you won’t have to put the purchase on your credit card.
2. Start paying down card balances.
In addition to saving regularly, a firm budget needs to reduce credit card and other debt quickly as well. Tackling credit card debt isn’t fun, but credit card spending makes up a significant portion of our overall stress in relation to personal finance issues.
The average American owes more than $6,000 in credit card debt. Coupled with the abysmal savings figures that most people sport, this means that the average American is in the red rather than the black.
Paying back as much money as possible quickly is the best way to handle this debt, but it's never a simple process. If you're having trouble with monthly payments above the minimum, then a consolidation loan or balance transfer might be a good idea.
These are methods of moving your debt from one place to another—to be clear, it doesn't reduce the amount you owe, but it can give you the advantage of a lower interest rate or promotional, zero interest rate for a set amount of time.
Additionally, consolidating multiple credit cards eliminates multiple pay dates and multiple minimum payments that must be kept up. A single monthly payment can often reduce the monthly payout that you owe each month, giving you the ability to pay more of the principal faster during the promotional rate period or the long term.
Moving all of your credit-related debt under the umbrella of the best deal available is a great way to expand your peace of mind as well. Rather than maintaining a hectic repayment schedule that drains your available cash at multiple times throughout the month, you can focus all your attention on one due date and a single balance that must be eliminated over time.
3. Reduce your monthly payouts.
In addition to cleaning up your debts, an easy way to clean your overall finances is to identify your largest expenses and work to reduce them. Your rent or mortgage payment, electricity and gas bills, and insurance, television, and internet are all highly negotiable targets that can be chipped away at, saving you a ton of money over the long term.
Your home in particular can often run up to half of your total budget each month. Everyone wants to live in a luxurious home, but renting a place that trends toward the average or even lower (more like 25% for twenty-somethings) in the short term can free up an incredible amount of capital for other essential purchases or direct savings gains.
The more you can save on these big-ticket items in your younger years, the more capital you'll have to play with when shopping for your family’s luxurious home in the future. Financial freedom then is bought with frugality now. Shopping around for affordable storage units in Spokane can help you free up space in your home for other cost-cutting measures as well, like taking on a roommate.
Anything you can do to lower the costs of your housing expenses is a win for your long term finances. Self-storage facilities offer optimal discounts and a great secure space for your extra belongings while you rent a room or pack up for a move into a more affordable home.
4. Shop with a plan.
The supermarket is another budget buster that you can defeat if you go into the ritual activity with a plan. Searching for tips for saving money while shopping will likely give you the same sage advice no matter where you find it: get in and out as quickly as possible, and always bring a list with you.
Supermarkets are designed to make you part with your money. They place staple items in opposite corners of the store, keep the facility at a brisk temperature, and play slow music in order to extend your stay within the aisles.
The longer you spend in the shop, the more likely you are to pick up impulse purchases, draining your cash in the process. Utilizing a list that includes money-saving household products like dryer balls and family pack meats is a great way to combat these tricky tactics. Stocking up on items you know you'll need can eliminate extra trips to the store and save you a considerable amount in frivolous spending.
5. Buy brands off-seasonally.
Seeking out beauty products like stick on nails is a great way to skip out on the salon prices. Purchasing these and other luxury or brand name items opposite the seasonal rush is an unbeatable way to save money. Planning purchases ahead is the best way to take advantage of off-season sales.
You can often predict when you'll need a new winter coat or a new set of bathing suits. Buying sun holiday attire during the dead of winter and vice versa is an excellent way to lock in rock bottom pricing on the things you will always need.
Saving on your monthly or yearly purchases is as simple as making and sticking to a plan. Find coupons or other discounts, pay down debts, and trade in high-expense rentals for more manageable properties in the short term in order to create daylight in your budget that will lead to long term financial freedom.