Are you trying to save money? Are you unsure what the best way to do it is? When you first start saving money, you might find that you have to actively strive to stick with your plan, and you might find you have days where you struggle more than others. However, the more you do it, the more routine it will be, and the easier saving money will become. Here are some tips to help you build your savings.
Set a Goal
When you first start saving money, it’s helpful to know what you’re saving for. It’s also a good idea to create a timeline for building your savings. A timeline will be beneficial because it will give you something to look forward to and keep you motivated.
For example, if you’re saving to buy a home, consider when you want to buy it. If you decide to buy a home in five years with a 20% down payment, then you know how much you should start saving each month.
Pay Yourself First
When you wait until the end of the month to put your money into savings, you’ll likely find that you’ve already spent it. Whether you’re living off of earned income or disability income insurance, set up an automatic transfer for every time you get a payment to move a preset amount from your checking to your savings account. The transfer helps better ensure that you meet your savings goal.
It might seem counterintuitive to pay your debt off when you’re trying to save money, but you’re paying interest every month you carry a balance on your credit cards and loans. The amount you pay in interest quickly adds up and takes money from you that you could be moving into savings.
Experts agree that the best way to pay your debt off quickly is to use the snowball effect. Work on paying one bill off. Then, add what you were paying for the first bill on top of the payment for the next bill. Continue doing that until all of your debt is paid off. You’ll find that following this method allows you to pay your debt down much faster than it would have taken you otherwise.
Stay Out of the Store
The more you go to the store, the more you’re going to save. Limit your shopping trips to as few as possible. If you can get away with only once a month trips to the store for groceries and necessities, do that. If you have to run into the store for a necessity you ran out of, be mindful that you don’t do any impulse buys.