Do you find it hard to save money? If so, you’re not alone. Saving money will always be an important financial habit to adopt but doing so may not come easy for everyone. Making the effort to save your money may protect you in the event of a financial emergency. It can also help you pay for large purchases, avoid debt, reduce financial stress and more. If you’re trying to figure out how to save money, here are a few ways to get started.
Five ways to save money
Making a few changes in your daily life can help you in the long run. Some ways to save money include:
- Set a budget. Before you can begin saving money, you need to set a budget. By knowing exactly where your money is going every month, you’ll have the chance to cut a few expenses that don’t seem as necessary, or it may make you realize what expenses need more money allocated. You can use tools like Budget to help you stay on track.
- Cut down on monthly memberships and subscriptions. If you’re not using things like your gym membership, streaming services, magazine subscriptions etc., you don’t have to cut out these things permanently. They can be eliminated until you reach your savings goals.
- Cut down on your grocery spending. Depending on how many people you’re shopping for, groceries may be costly. It’s easy to get sidetracked and purchase whatever you see, but these little purchases add up every month. You can help save money on groceries by planning your meals each week and evaluating what you already have in stock before you head back to the store.
- Reduce utility costs. Reducing your usage and cost of utilities may help save a few extra dollars every month. Start with simple things like taking shorter showers, shutting off lights when you’re not using them, or turning off the thermostat when it’s not needed.
- Map out major purchases. Consider planning in advance for major purchases. This may help you stay on track to save money and avoid impulse buying.
Short term goals vs. long-term goals
Short-term goals are those expenses that are more immediate. Timelines may vary depending on the situation, but these are typically expenses that you’ll spend money on within a few months or years. For example, if you’re wondering how to save money for a car or how to save money for a wedding, these would be considered short-term goals. For goals like these that may not be too far out, putting an amount away each month, like $100, can make a difference.
Some examples of short-term goals are:
- Paying off credit card debt
- Personal goods
- Minor repairs and home improvements
- Emergency fund
Long-term goals are expenses and goals that may take more time to accomplish. They typically involve more money and regular attention compared to short-term goals. Some examples of long-term goals include:
- Paying off student loans earlier
- Paying off a mortgage earlier
- Starting a business
- Saving for a child’s college tuition
Timing is an important part of any savings plan. Because not all savings goals are the same, the length of time associated with each one plays a big role in making a plan. Saving for a goal that’s one year out will most likely have a different approach than one that’s a decade away.
How a savings account may help with your financial goals
To help with your financial goals, savings accounts are a safe and reliable place to keep your money. Having a savings account is one of the most important steps you can take to help you become financially responsible and reach your financial goals.
Using the 30-day rule to help save
If you’re looking for some motivation to help you save, the 30-day rule may be a good start. Impulsive purchases can be tempting, which is why this popular method was developed to help people set aside more money.
With the 30-day savings rule, the goal is to avoid making impulsive purchases. Instead of swiping your card, wait 30 days to see if it’s worth purchasing and put the money it would cost in your savings account instead. Write down the information surrounding the item like its name, service and the cost. Use the 30 days to consider if it’s a true need or just a want.
If you realize that you still want to buy the item after the 30-days is over, go for it. If you forgot about the item or find that it isn’t a necessary purchase, the money stays in your account. This method can help boost your savings over time and help readjust your spending habits.
How saving money can help with financial success
Saving money can help you plan for financial success due to a number of reasons. Some include:
- It may give you a sense of freedom. Even if you don’t know exactly what you’re saving for right now, you’ll most likely find something you want to save for in the future, like a new car, new home, vacation and more.
- It may provide long-term security. The future is unpredictable, so saving money is key to building a safety net fund. Saving money can potentially help with financial roadblocks and building financial security.
- It may be useful in emergencies. Whether it’s a family emergency, or a broken-down car, having funds put aside can help you avoid adding more stress to the situation.
While there are countless reasons for you to save, it’s key to find the one that resonates with you the most. If you’re looking for a safe space to deposit your money, a savings account can help you achieve your savings goals. Once you get into the habit of doing so, you may even forget that there was ever a time when you didn’t save.