A recent survey found that 62% of Americans have less than $1,000 dollars in their savings account—if they have any savings at all. While most people would like to set aside money each month, a tight budget can make this seem like an impossible task. If this sounds like you, here are eight practical ways to start saving regularly:
Make small changes to your budget across several expenses
If you don’t have a budget, it’s time to make one. Once you have your budget, it is often easier to make small spending cuts across multiple areas than to target a single expense. This means taking a hard look at your regular monthly expenses like cable, internet, phone service and even your housing payments. This is a process of give and take and will take some time to find a balance. Most of us could live without a complicated cable package with other affordable streaming options available today.
Don’t turn to credit cards to fill the spending gaps in your budget
One of the biggest mistakes people make is to rely on credit cards to make room in their budget. While this does allow you to take one step forward by saving a little money in the short-term, you end up taking two steps backward. Any money you save will need to go into repaying that debt later at a higher cost. Instead, focus on paying down credit card debt by including payments into your budget while still building a small emergency savings fund. This allows you to pay unforeseen emergencies without taking on more debt.
Shop around before you buy
Comparison shopping is a must when you are living on a tight budget. You might be surprised at the savings you can find with groceries, clothing and even normal monthly services like your cell phone bill. When you take the time to comparison shop, it does more than just save you money. It also makes you aware of your everyday spending.
Give yourself short-term and long-term goals
Saving is already hard. It’s even harder if you’re just saving without a purpose. Instead, set some specific goals that you care about. Come up with a timeline that you can stick to and saving becomes much easier. Just to spark your imagination, saving for retirement or building an emergency fund is a great place to start.
Small steps matter. Start saving for retirement by putting a small amount of money away today.
Get your money in order this April for Financial Literacy Month.
