Everyone would like to have more savings, but the reality of today’s economy is that even those with full-time, salaried positions often can’t afford to put away much. From taxes and health insurance to bills and loan repayments, there are more demands to spend than opportunities to save. Although this is frustrating, there are simple practices that can help you extend your income and start building a nest egg.
Challenge Yourself to Save Each Week
One of the biggest hurdles to saving when you don’t have a lot leftover is giving away what little you may have. Even if it’s just $10, put it in the bank account instead of spending it on something you don’t really need. While personal indulgence is important once and a while, choose a specific time each month to do this rather than spending it whenever you are in the mood. No amount is too little; even $5 saved is better than $5 spent that you won’t get back. Some savings accounts offer interest rates that are better than others. You will want the account that pays the most back in interest as it lets your money work for you rather than just sit in the bank. Find a compound interest calculator online and you will see just how powerful compound interest is.
Automate Your Savings
If your employer offers a 401(k) plan, automate your deductions so they come directly out of your paycheck. The same should be done with taxes and deposits into a separate savings account with your bank. When the funds are automatically deducted, you will be less likely to overspend or rationalize not putting money where it truly needs to go. You’ll also get a more realistic perspective of your budget and learn how you need to reassess and prioritize your income.
Refinance Your Student Loans
Student loan debt is crippling for millions of Americans, but the cost of your education doesn’t have to ruin your life. You can still become financially stable and even put money away while paying off your debt. Refinancing your student loans can help you save more money each month. Rather than struggling to pay an exorbitant amount or skipping payments to make ends meet, refinancing will work within your means to frame a repayment plan that respects your budget and current expenses.
It can be easier to dedicate yourself to savings when you actually have an end-goal in mind. An emergency fund is one idea that helps people feel more motivated to put any extra money they have away. You never know when something might happen, and covering your health insurance deductible, bills or other essential finances could save you from financial ruin during a difficult time. Other goals could be smaller and more immediate, such as saving up to buy a house, preparing to have a baby or buying a new car.
Find New Ways to Lower Expenses
Could you save money on your gas by walking, biking or roller skating somewhere close? Maybe you could curb your coffee habit or smoking by replacing with a self-care activity like yoga or listening to music on your break. Commit to less expensive, energy-consuming hobbies as well. Rather than watching TV or keeping your laptop plugged in for hours, read a book, go outside or take up painting, drawing or writing. With a creative mindset, you can lower expenses simply by using things less.