Start Boosting Your Savings Now!
We’ve all heard the saying. “a penny saved is a penny earned,” but why aren’t we able to save more? The reasons (or excuses) can be varied-some of us are overextended, meaning we are paying out more than we are taking in; for others, it may be a bad case of FOMO (fear of missing out) and for others, it may not seem important.
According to a recent Vanguard study, a majority of Americans have less than $5,000 in their emergency fund. My recent experience with an unforeseen injury proved to me that we all need to bump up our own savings rate. My injury has cost me dearly, both physically, emotionally and FISCALLY! When totaling up the money that I have spent on deductibles and co-pays, I can share that I have spent over three times the five-thousand-dollar figure! One injury, one unforeseen emergency can easily derail a savings fund!
Here are some tips to boost your savings account that center around your everyday habits:
- Set a savings goal. How much do you need to cover an unforeseen emergency? A suggested initial amount is the total of three months of all of your fixed expenses. These expenses include the “must haves:” your rent or mortgage, auto loans, utilities, food, and your current financial obligations. Keep your emergency savings in a separate savings account so you can track your progress and earmark it for emergency use only
- Bring your lunch to work instead of eating out: The cost to make your lunch is approximately $2.00 vs. the $7.00 for the average lunch eating out. The saving s of $5.00 every weekday is $25.00 a week or $100.00 a month!
- Brew your own cup of coffee to go rather than buying t on the way to work. If you spend a minimal amount of $2.00 each workday on your cup of joe, you are out $10.00. By incorporating this new habit, you can put away $40.00 a month!
- Take time to evaluate your cell phone plan: are you paying for data that you’re not using? It makes sense to review your minutes and data and lower the plan limits if possible.
- If you are trying to pay off credit card debt, incorporate a strategy and stick to it! There are several strategies that can help you pay off your debt: The “Ladder Strategy”, the “Snowball Strategy”, and the “Emotional Trigger Strategy.” Decide which strategy best suits your needs and plan to incorporate this into your monthly budget.
- Review your cable bill! How much are you paying to watch TV? Consider a lower cost streaming service to save hundreds over a year!
- Go back and review your spending on eating out. How much have you spent in the past month eating out because you were too tired, overwhelmed or just didn’t feel like cooking dinner? Try cutting this amount in half!
- Our spending on food also includes grocery shopping. This is a part of the budget that can always use some tweaking! I suggest creating a meal plan before you go to the grocery store: plot out five meals at a time. Then, write down all of the ingredients you will need for those meals. This will eliminate multiple trips to the store, where you may find yourself buying more than you anticipated. To maximize this step, make a map of your grocery store and then make your list accordingly. No more wandering down aisles that you don’t need to visit-this will save you time and money!
- How many emails are you getting daily from retailers? You probably signed up for an initial discount offer and now your inbox is full of daily special sales! Each one of these is designed to tempt you to part with your money-simply unsubscribe!
- Marie Kondo (“The Art of Tidying Up”) has started a movement of purging our homes! Look around your home-what are you not using? Consider selling items to raise some extra cash!
- Here is one of my favorite tips: SAVE YOUR CHANGE! I have been doing this for years! The little amounts you are putting away can definitely add up! Every year, my vacation spending money has been funded by this habit!
These tips can be easily incorporated into your daily life and will allow you to begin the habit of saving more for your emergency fund. Knowing that you can cover unexpected expenses is a foundational step in building financial confidence!
Today’s Author: Jane Helm is the Principal of Money Mentor Group. As a wealth coach, Jane combines decades of financial services experience with a degree in social work and psychology to bring positive financial change to her client’s lives. She is a Partner Coach with the Wholistic Coaching Coalition and co-founded the Build Your Own Business networking group. Jane can be reached via email at [email protected]