Make saving a breeze with this realistic action plan.
Saving a portion of your income can seem difficult and overwhelming if you’re jumping from paycheck to paycheck. It’s important to budget and save whenever you can but it doesn’t have to be so hard. Financial expert Nicole Lapin shared three simple strategies so you can build up your emergency fund or save for a big purchase in the future.
Are you throwing your money away without even realizing it? Check your monthly bills and statements and stop any unnecessary subscriptions you may have signed up for. For example, you might be paying too much on premium cable television when you only watch the same five channels. The average premium cable subscription is approximately $1,200 per year but you can easily rent or stream a movie online for as little as $2 per movie. Simply cancel your service and put that $1,198 back into your pocket. If it’s not the cable bill keeping your wallet thin, see if you’re getting magazines or newspapers delivered to your door that you aren’t reading regularly. Or maybe it’s your gym membership that’s setting you back more than you bargained for. Be honest with yourself and determine which services you can afford and which ones you should be cutting back on.
Transfer Your Money Automatically
If you don’t already have a savings account, open one up. Once your account is ready, set up an auto transfer from your checking account and stop using your debit card. Need more of a push? Cut up your debit card completely – no access means you’ll be compelled to save money. You won’t miss any money that’s not already in front of you. Begin by depositing a small percentage of your paycheck or a fixed amount like $25 each week. Lapin’s bonus tip: Check your department store, grocery store, or pharmacy receipts and look for a line at the bottom of each receipt that says “You saved X amount.” Set aside the same amount of money as the dollars you’ve saved. Every little bit counts and soon your nest egg will be substantial!
Stop Charging Small Purchases
Making small, daily transactions can add up especially if you don’t pay off your balance at the end of every month. Extra charges with late fees and interest rates can grow quickly and exponentially and hinder your well-intentioned saving efforts. If you’re having trouble paying off your card balances, use cash for everyday buys and put the money you might have paid to credit card companies back into your savings account.