By Guest Contributor Trevor Matthews
More and more people are living from paycheck to paycheck. New statistics show that nearly sixty percent of Americans have less than five hundred dollars in their savings account. What would you do if you had an unexpected expense of this amount? Would you borrow money from family, take out a loan, or use a credit card?
Does that last question have you seriously thinking about what you would do if you had an unexpected expense? Fear not because you’re not alone, and we are here to help! Check out these seven money saving tips to get your savings account into the green!
Evaluate Your Income
Your income dictates your budget and what you can spend. It is important to know your worth. What is the average salary for your position, based on your experience, and your location? If you’re not sure it might be worth looking into.
Have you been with your company for three years or thirteen years? It might be time to ask for a raise or seek out a new career opportunity. An increase in salary can definitely increase your savings account!
1. Track Your Expenses
Do you know how much you spend each money on bills, credit card payments, or miscellaneous expenses? You should be tracking your expenses each month. I personally use a spreadsheet to track each and every bill, from large bills to small expenses such as netflix or google music.
Make a plan to pay off the debt that you already have. Lower your credit card payments and other debts will greatly benefit your savings account in the long run. For more tips on how to eliminate your debt and repair your credit, check out www.debtsteps.com!
2. Set A Realistic Budget
After following tips one and two, it is time to set a budget. However, your budget must be a realistic one. You cannot have an accurate budget if you forget to budget for things such as eating out or filling up the gas tank.
If you are going to spend money on it, and you know it’s something you cannot cut out add it to the budget. Using a realistic budget will give you an idea for how much money you can realistically put into your savings account at the beginning of each month.
3. Practice Responsible Spending
Now that we’ve discussed setting a realistic budget, it might be time to practice some hard responsible spending. Do you really need to eat out six nights a week, or buy coffee every morning? Those type of expenses will add up quicker than you might realize!
Cutting out a few minor items that we spend money on can quickly add up to extra cash going into your savings account each week. For an example, if you decide to take coffee from home instead of buying it, you can save between $25 and $40 a week. That all adds up to a $100 or more in just one month.
4. Make a Savings Goal
It is important to make a savings goal. I can be a goal of any amount, but make one and stick to it. You can set a savings goal for a large amount such as a down payment for a house, or a smaller goal of having that $500 set aside for emergency expenses.
5. Bring In Extra Income
Do you have a hobby that could bring in extra income? Do you have an eye for photograph or a talent for writing? Why not advantage of your talents and work or sell stuff on the side for extra money! With the extra money you bring in add it straight towards your savings goal.
6. Invest In Your Future
Investing in your future is important, don’t forget about saving for retirement and your future. Investing is an excellent way to save money for your future. You can invest your savings into bonds, stocks, CDs (Certificates of Deposit), and other options. Some investment options will be safer than others, so practice caution.
Be sure to use these tips to increase your savings and decrease your financial stress! Don’t get overwhelmed but start somewhere. Make saving goals and practice smart spending, soon you’ll be on your way to financial security!
More importantly, you’ll be able to better prepare your kids for financial responsibility as well. It’s a win-win. How do you save smarter? Let us know in the comments!
Trevor Matthews has spent several decades working as a financial advisor and now he's sharing his experience with people everywhere.
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