Everyone knows that saving money for your future is important. But with the high cost of living, it can feel impossible to put money away today for tomorrow’s needs. According to the U.S. Bureau of Economic Analysis, the average American saves only 5% of their disposable income. That’s why we’ve put together 10 simple ways you can set yourself up to put more into your savings every month. Try these life hacks and watch the money pile up:
Make a Budget!:
If your savings are just “whatever’s left at the end of the month,” you’re setting yourself up for disappointment. You have to budget for savings just like you budget for housing, food, and other necessities. To make a budget, just create a simple spreadsheet with your monthly income in one column and regular monthly expenses in the other. It’s a great way to see what you’re spending now and to be more mindful of how you want to spend going forward. When you decide that a set amount goes to savings every month, it becomes much easier to start building real money.
Stick to 50/15/5:
Some experts recommend a 50/15/5 rule for budgeting: spend 50% of your after-tax money on necessities, put 15% into savings, and save 5% for emergencies. The remaining 30% can go to fun expenses like entertainment or travel.
Automate Everything:
It’s a pain to think about moving money into your savings account every month. Fortunately, most modern online or mobile banking systems let you set up an automatic transfer and never worry about it again. It’s like magical banking elves that do the saving for you!
Use All of Your Work Benefits:
Many jobs offer matching funds when you contribute a certain percentage of your paycheck to a retirement account like a 401(k). That’s extra money on top of your regular salary that you could be missing out on. If you can afford to contribute enough to get the full match, you’ll be putting away serious money for your future.
Start Early:
The best day to start saving was ten years ago. The second best day is today. The earlier you can start, the better, because the power of compounding interest over time adds up. But don’t feel bad if you’re just getting around to saving now — you’re already ahead of the game. What matters is that you start.
Eat In:
One surefire way to save more money is by making your own meals. Restaurants and bars are fun, but they’re also money vacuums. Set a clear monthly budget for eating out and stick to it. That doesn’t mean you can never go to a nice restaurant, just that buying lunch every day gets very expensive. You could save hundreds of dollars a month that can go directly to your savings.
Explore Apps:
Smartphone apps are about more than playing games. Now you can download apps that help you budget and save. The best apps do everything from automatically putting money aside to helping you with your investment decisions.
Pay Off Debt:
Nothing keeps you from saving like owing money. Debt — especially high-interest debt like credit cards — can be a drag on your financial life. Do everything you can to pay off your debt now, even if it means putting off saving for a little while. When that debt payment disappears, you can put the same amount into your savings account instead.
Review Your Subscriptions:
With so many subscription services out there, it’s easy to forget how many you have. Take a look at your credit card bill, and you may be surprised by how much you’re paying every month for services you barely use. From entertainment to clothing to food, there are probably less expensive ways to get what you’re paying for. The money you save by eliminating subscriptions can go right into your savings.
Make More Money:
You know what makes it easier to save more money? Making more money! Now might be the perfect time to look for a new job that pays more, especially if you’re in a high-demand field. You can also explore a side gig to make a few hundred extra dollars each month, and send that money into your savings account.
Your Equity Bank savings account can be a powerful tool for building your wealth. Our Digital Banking system is also full of tools to help you make a budget and manage all your accounts. For more advice on how to save for your future, get in touch with us today!