You Can Save More Money

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Three Simple Ways to Make More Room in Your Budget

Intellectually, we can all agree that it makes good sense to save money for the future. At some point, an unforeseen emergency will require you to reach above and beyond your normal monthly budget. Or imagine this, you’ll want to retire.

These things take planning, and most of all, they require MONEY.

But somehow, we still don’t save. In fact, many of us are doing the opposite. Living above our means, using high interest credit cards to buy things we can’t afford and continuing to put off the retirement fund and safety net savings accounts.

If this is you, you’re not alone.

  • 33% of Americans haven’t started saving for retirement.
  • 23% of Americans have saved less than $10,000 for retirement.
  • 8/10 people are in debt, carrying an average of $132,086, with $15,310 on credit cards.

Ok, so you’re not alone. That doesn’t mean it’s a good place to be. If you’re one of the people carrying an average of $15,310 on credit cards, you’re paying nearly $7,000 in interest per year. That is $7,000 that could be invested, stocked away in a high interest savings account, or paid toward the principal on student loans or mortgages.

But with stagnant wages and mounting costs for housing, medical bills and other monthly expenses, how do you get out from underneath all of that debt? Where does one begin?

JUST START SOMEWHERE.

If you’re inundated with debt and struggling to save money, you have to start by changing the way you think about your finances.

Switch the focus from HOW TO SAVE MORE to HOW TO SPEND LESS.

While it may be hard to earn more, there is almost always a way to spend less. You have to take a good look, track where your money is going for a few months, and then start to figure out where you can make changes. Even if they seem small.

Here are a few ideas to get you started, and to get you thinking.

  1. Spend Less Than You Earn – If you’re using credit cards to pay for everyday expenses, and can’t seem to pay the balance at the end of the month, then you’re spending more than you earn.

Here are a few tips to get started down the right path.

  • Commit to giving your finances a good, hard look. Sit down and do the math. Figure out how much money is coming in each month, and how much you owe in bills. The remainder is what you have to work with, for spending and for saving. Don’t count credit cards as a reasonable extension of your income. They’re not.
  • Use a budgeting app, and stick to it as if your life depended on it. Apps such as Mint.com and You Need A Budget (YNAB) take time to get used to, but they’re worth it in the long run. Your eyes will be opened to your actual spending, and you’ll be forced to take a long look at where your money is going.
  1. Stare Down Your Discretionary Spending – Everyone thinks that they’ve cut back in every way possible. But generally, there are things in the mix that could absolutely go. Here are a couple of examples:
  • Cable television. There are a lot of options that can bridge the gap between access to 800 channels and getting rid of television altogether. Netflix is $9.99/month, and offers a variety of shows and movies for your binge watching pleasure. Many cable stations offer online streaming for free and Amazon Prime members have access to a variety of television shows and movies as part of their membership.
  • Fitness memberships. Do you go to the gym? Be honest. If the answer is no, then immediately get rid of your membership. If you do, think about alternatives. Run outside. Sign up for an online yoga membership, instead of spending $20/class to be taught in person? Purchase the few things you use at the gym and workout at home.
  1. Get yourself out of debt – In the title of this post, it talks about SIMPLE ways to make more room in your budget. And while getting rid of debt may sound like the opposite of simple, it’s really not. If you’re in debt, you have to get out. Use some of these techniques to find more wiggle room in your budget, and then pay your debt off faster. Find offers for 0% APR balance transfers, and move your balances from high interest cards. Once the balances are there, PAY THEM OFF. Once you’re finished paying off the cards, use that money to make extra payments to your student loans or mortgage.

You really can save more money, but getting there may require some intermediate steps. Just begin, making small changes where you can and getting really clear on how you spend the precious money you earn. You work hard. Be sure to make it count.

Comments

  1. This is just the pecerft answer for all of us

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