The answer to most questions about financial matters seems to be “start saving.” Be prepared for unexpected expenses like new tires, furnace repair or higher than expected utility bills: start saving for emergencies. Want to take a little vacation? Start saving. Worried about medical expenses? Start saving.
But how do you start saving when you are basically living paycheck-to-paycheck?
It is possible with these 5 painless tips:
1. Empty your pockets each day into a jar. You will be surprised by how quickly your loose change adds up. There is a Folgers coffee commercial that demonstrates this tip perfectly:
2. Along the same lines as saving your change, use programs like the Bank of America “round up” program. The program rounds up purchases made with your bank card and automatically deposits them into your savings account. If you don’t use BoA, check out the Acrons app. The idea is the same except rather than putting the money in your savings account, it is invested for you. Acrons offers a number of different ways to set aside money from rounding up your purchases to one time investments and more.
3. Set up an automatic deposit from your checking to your savings. Many workers have their paychecks automatically deposited each payday into their checking account. Contact your bank and have a portion of that money automatically transferred to savings. You start saving even before you have a chance to spend your paycheck. Skim a little off the top before you miss it. Along those same lines, the next time you get a raise, have the new amount set aside for savings. You can do the same with commission checks or quarterly bonuses; save a portion of that extra income for when you might need it later.
4. Review your credit card statements with a fine tooth comb. Often online purchases set you up for automatic “special discount program” monthly fees. For example, buy athletic wear from one well know website and you are automatically charged $25 each month so that you benefit from additional discounts in the future. Unless you plan on buying a lot from that store, that is $25 you could put in savings. The same is true for online services and streaming devices. You sign up because it is only five or ten dollars a month, however, the next thing you know you are spending $80 for Hulu, Netflix, Spotify, Amazon Prime, Acron TV, and more. Review those automatic charges and make sure you really need all of them. In our experience, many consumers have no idea that their card is being charged a set fee each month and they don’t even know what it is for.
5. Only spend cash. When you put the credit cards away and only spend the money you have on hand, it is amazing how many things we realize we can do without. By limiting yourself to only paying with cash for incidentals, you will be amazed by how much you save each month.
There are many other ways of deliberating saving money each month but these five will get you started without causing too much hardship.
One last suggestion:
Make a list of everything you have spent in the last four months. Put the expenses into categories:
· Eating out
· Hobby supplies
· Drinks with friends
· Gas/car maintenance
How much did you spend that you didn’t really need to? Is there an area that you can cut back on for a few months for the purposes of increasing your savings?
Sometimes knowledge is a powerful tool.
If your financial situation requires more significant cash, you might want to talk with a professional to examine your options. Southern Illinois Bankruptcy Attorney law firm Bankruptcy Advocates is located in Carbondale and serves a wide geographic community including Carbondale, Murphysboro, Marion, West Frankfort, Johnston City, Benton, Herrin, DuQuoin, and Pickneyville. We are a debt relief agency. Our southern Illinois bankruptcy attorneys help people file for relief under the Bankruptcy Code. The first consultation is always free. Give us a call at 618-549-9800 or email us at [email protected] to speak about your case or legal matter. Convenient appointment times are available.