It’s the most wonderful time of year for spending, not saving. But if you’re like most U.S. consumers, there’s a nagging voice in the back of your head whispering that you really need to start saving more….maybe it will be your New Year’s resolution.
Thanks to America Saves, here are 9 ways to save money. Visit their website for the full list of 54 ways to save money!
1) Build an emergency fund. It can make all the difference. Low-income families with at least $500 in an emergency fund are better off financially than moderate-income families with less saved up.
2) Establish your budget. Are you looking for an easy way to begin? On the first day of a new month, get a receipt for everything you purchase. Stack the receipts into categories like restaurants, groceries, and personal care. At the end of the month you will be able to clearly see where your money is going.
3) Budget with cash and envelopes. If you have trouble with overspending, try the envelope budget system where you use a set amount of cash for most spending. And once the cash is gone, it’s gone.
4) Don’t just save money, save. There’s a difference between saving money and saving money for your future. So don’t just spend less, put the money you save into a savings account to plan for college expenses, retirement, or emergencies that can leave you financially better off.
5) Save automatically. Setting up automatic savings is the easiest and most effective way to save, and it puts extra cash out of sight and out of mind. Every pay period, have your employer deduct a certain amount from your paycheck and transfer it to a retirement or savings account. Ask your HR representative for more details about how to set this up. Or every month, have your bank or credit union transfer a fixed amount from your checking account to a savings or investment account.
6) Aim for short-term savings goals. Make a goal such as setting aside $20 a week or month, rather than a longer term savings goal. People save more successfully when they keep short-term goals in sight.
7) Start saving for your retirement as early as possible. Few people get rich through their wages alone. It’s the miracle of compound interest, or earning interest on your interest over many years, that builds wealth. Because time is on their side, the youngest workers are in the best position to save for retirement.
8) Take full advantage of employer matches to your retirement plan. Often as an incentive, employers will match a certain amount of what you save in a retirement plan such as a 401(k). If you don’t take full advantage of this match, you’re leaving money on the table.
9) Save your windfalls and tax refunds. Every time you receive a windfall, such as a work bonus, inheritance, contest winnings, or tax refund, put a portion into your savings account.