If you’ve been living paycheck to paycheck, starting a savings account might seem like an impossible feat. However, there are things you can do to save money, even if it’s only a little bit at a time. For example:
Shop Smarter
One major reason why people can’t save is because they live above their means — so see where you can cut back your spending. If you have a cell phone plan with a major provider, cancel it and get a pay-as-you-go phone; you can reduce a monthly $200 cell phone bill into one that costs just $40. Consider canceling your cable or go to the most basic package. If you decide to cancel it completely, keep your Internet service so you can take advantage of video streaming services such as Netflix and Hulu. And if you want to watch live local channels, a digital antenna will provide them for free.
Direct Deposit Your Savings
Automatically funnel part of your paycheck into your savings account. If you never see the money, you wont even miss it. Even if you only have $10 that you can spare out of each paycheck, thats $10 you more than you had saved before — and it all adds up. Then increase the amount as your financial circumstances improve.
Leverage Money-Saving Apps
Apps like Acorns allow you to round up your purchases and transfer the remaining change to an account of your choice. For example, if you spend $9.29 on a shirt, you can opt to round the purchase up to $10 with the app. The remaining 61 cents will then transfer to a side account. It may not seem like much, but even transferring a few cents per day will add up over time.
Be an Entrepreneur
Don Gayhardt is a successful CEO who currently manages a company with more than 400 international locations throughout the world, but you don’t have to grow a giant business like he did to be successful — just find a side hustle you enjoy doing. As Gayhardt says, “The best ideas always win.” He’s right. And you only need one good idea to be successful. Try coming up with modest earning potential and then put that extra cash into your savings account.
Reduce Your Discretionary Spending
It’s important to know the difference between a want and a need. Necessities include things like gasoline and anything else you absolutely need to get by until the following paycheck. Fast food, movies, nights out, gas station drinks, and anything else you buy should be limited to a budget. Instead of buying Starbucks every day, put that daily $5 expenditure into a jar. Then take the jar to the bank every month and deposit the money into your savings account. And if you think you’ll have trouble breaking your Starbuck’s habit, limit your trips to one day per week.
Take Advantage of Your Tax Returns
Many folks can’t help blowing their well-deserved tax refunds on vacations, cars, electronics and other big ticket items. The better option, of course, is to stick that cash from Uncle Sam into a savings account. Depending on the size of your return, you could save thousands per year on top of your direct deposits and spare change apps. That’s not to say you shouldn’t treat yourself to something special. Just make sure you divert a large chunk of it into your savings account.
The bottom line is this: For those who are determined, saving money is rarely, if ever, impossible. You just need to be smart about it. Whether you save several hundred bucks per month or just a little spare change, eventually it all adds up.
Photo Credit: Alan Cleaver
Mark says
A good way to reduce discretionary spending is to see what it really costs you
Jayson says
Shop smarter is really a good way to increase savings! I cut my cable last two years ago, and I am glad that I did.
Ellis says
I put a lot of necessary expenses on credit cards, utilizing the cash-back card that gets the best return in each category. Then I make sure to pay the card in full each month. This saves us several hundred dollars every year on each of a few cards.
I also make sure to use available coupons, coupon codes for online shopping, and to file for all rebates. My favorite double play is to get a really good buy on some necessity, then charge it on a card that’s giving me an additional 5% back, and pay it off when the bill comes. This also doubles the warranty on some products.
Then put that cash back in the bank.
Taddy says
My husband and I got a tax refund this year instead of owing money. We did some calculations to figure out what our shares would be (since we had different ideas on what to do with the money). I took my share and used it to pay off a significant chunk of my student loans, he has his in the account we use to pay our mortgage out of.
Both good ideas I think.
Len Penzo says
Agreed, Taddy!
samuel m. munyao says
I really appreciate your work i’m pretty much wiser on saving. keep up mates.