Saving is important, but unfortunately, this essential financial move can be pushed to the wayside in favour of paying off debt, going on trips, or luxury items that we definitely don’t need. Experts agree that individuals should have savings that cover six months of living expenses, but a small portion of the population has embraced this ideology. Americans as a whole don’t have a handle on their saving habits, and it’s always a good idea to determine ways you can bolster your savings accounts.
If you find it hard to autonomously place money aside, take advantage of the oodles of technological advancements. Use any online banking resource you have and set up automatic withdrawals from your checking account to your savings account. This way, the money will go straight into your savings without you having seen it first—you can’t miss what you didn’t “have” in the first place.
Make Monthly Budgets
If you find yourself struggling to save any significant amount of money, make sure you’re following a detailed monthly budget. Sometimes all we need to do to bolster our savings efforts is to improve self-awareness. Budgeting can be surprisingly difficult, especially for an individual who has never done so before. It’s essential to understand where your money is going, and assess the areas in which you’re throwing away cash that could be going straight into your savings account. Start by listing out all the essentials you are required to pay for: rent, insurance, food, and the like. Pull up your credit statements and round up all the expenses that you could have lived without. Sometimes the shock of how much we spend on frivolous material items and entertainment can be enough to alter spending habits for the better. If you need help starting your new budgeting regimen, use a budgeting app like GoodBudget to help ease you into the process.
Cut Down on Unnecessary Expenses
Now that you’ve got a budget to work with, you can take steps to ensure you’re not throwing money away on things you don’t need. One of the hugest money sucks is eating out. Instead of picking up lunch during the work week, spend Sunday evening putting together meals for each day of the week using bulk ingredients. Instead of heading out for dinner with your friends, invite everyone over for a potluck get together. Instead of going out with your credit card, take a set amount of cash; once you’ve used up everything in your wallet, your spending is done for the day, simple as that. There are so many little habits you can adopt in place of money-spending activities, so consider your expenses and determine what can be pared down.
Pay Off Lingering Debt
If you have debt hanging over your head, put a plan in place to deal with what you owe. For some, it’s easier to focus on paying off one debt at a time, for others, it’s easier to pay off the minimum amount due each month to avoid penalties and interest. Either way, it’s important to work on paying off debt, but don’t assume that means you can put off saving. Even if it’s just $20 a month, make the commitment to setting aside some money after paying your indebted accounts.
Look for Tax Breaks
Everyone dreads tax season; complicated filing and the potential of owing money to the IRS is enough to make the best of us quake in our boots. This year, take a look at your taxes differently, and check out the lucrative tax credits and deductions you might be missing out on. Websites like www.communitytax.com can help you figure out the best filing processes for you with the help of a tax professional. Whether it’s taking advantage of a Child Tax Credit or learning which filing status is best for you to claim, getting a comprehensive handle on your taxes can see you saving loads of money.