More than 20% of adults aren’t saving anything from their annual income, which means if an emergency comes up there are no backup funds to cover it. This type of situation can lead to very detrimental circumstances and should be avoided if at all possible.
Everyone knows that saving money is a smart financial move but it’s often easier said than done for many families.
Saving up and managing your finances requires deliberate, intentional steps and care for your money. We’ve compiled a list of our top twelve tips to help you get started!
1. Keep a Diary
Before you can really learn how to save money, you need to figure out how you’re currently spending money. Keeping a diary of all of the incoming and outgoing money transfers will help you get a realistic picture of your financial situation.
Without this information, it’s hard to figure out the best way forward with the most effective strategies. Most people find a spending diary very insightful and surprising!
2. Create a Budget
After you see where your money is currently going, it’s a good idea to create a more solid plan to control that spending and keep it in check.
A budget is the best way to make sure you’re needs are covered and you have enough left over to add to your savings. Without a budget, most people spend more than they intended to and things can quickly get out of control.
3. Have a Dedicated Savings Account
Though it seems simple, a great way to save is to open a savings account. When you have this place set up, the money doesn’t seem as accessible and it’s more likely to go unspent.
Most banks have great savings account options that can help you keep that money safe until it’s time to use it.
4. Open Multiple Savings Accounts
Since a savings account is such a good thing, why stop at one? Many find that having more than one savings account with specific purposes helps them to meet their savings goals easier.
Things like saving for a home, medical expenses, or a dream vacation all get a specific location so the money doesn’t get accidentally used for something else. This is a great way to be extra intentional about your money and what it’s being used for.
5. Pay Off Debts
Possibly the biggest distraction from saving is debt payments. It’s hard to want to save money when you know your interest is adding up with every passing month.
That’s why it’s helpful to pay off your debts as quickly as possible. This frees up both the money you’re spending in payments and interest, as well as the mental worry debts can cause.
6. Set Realistic Goals
Setting savings goals is one great way to focus your attention on not spending all your money. But the goals need to be realistic or you won’t be able to stick to them.
The more specific you can be in detailing your goal, the more motivated you’ll feel to hit that dream number in the account. It’s easier to make sacrifices when the bigger dream is in sight.