When it comes to saving money, the struggle is real.
According to a survey conducted by Pew Charitable Trusts about American family finances at the beginning of 2016, about 50% of respondents described their family as “financially insecure,” and 80% surveyed said their family has less in savings than what’s recommended for their lifestyle.
It’s safe to say most of us could use help planning for the certainties (and uncertainties) of our financial futures. But sometimes getting started is the hardest part. The key is to plot out a realistic plan that’s doable and will yield results.
Commit to one month of close financial record keeping. For 30 days, track every expenditure—regardless of how insignificant it might seem. (That morning coffee counts!) Keep a running list of items purchased and the amount spent. At the end of the month, categorize the expenses by food, gas, mortgage/rent, etc. and come up with a total for each area.
Establish some budgetary ground rules. With monthly finances vetted in detail, a clearer picture will emerge of exactly where those hard-earned dollars are going. Identify and separate the “needs” from the “wants.” Are there places where the budget can be tightened to allow for potential savings? Try to cut anything that isn’t absolutely necessary—at least for now. Assign a dollar amount to each monthly line item and stick to it.
Zero in on long-term and short-term savings goals. Everyone prioritizes savings differently. Deciding what to save for and how much to set aside depends on a number of factors—age, marital status, raising families, carving career paths, and personal ambitions help shape long-term and short-term financial goals. It all boils down to making choices. Saving for vacations (short-term), a new car (longer-term), or retirement (forward thinking) all require planning. Pin down what matters most and create a realistic timeline for how much money to sock away.
Set up automatic transfers to make saving simple. Shift the burden of discipline off yourself and set up a system that seamlessly draws cash from your checking account and moves it into a savings account every month. If the money’s already in savings, it’s less likely to be spent. Better yet, add a line item to the top of your monthly budget for “savings.” Pay yourself first.
Keep an eye on that growing nest egg. Nothing’s more satisfying than watching a savings account balance grow bigger and bigger—and those dollars will add up quickly. Higher-interest-rate savings accounts will boost your bottom line even more. Monitoring your progress feels great, but it also gives you the chance to tweak or change course as needed. Once you get some momentum going, you may uncover hidden opportunities to save more money.
Looking for more tips to keep your financial health in tip-top shape? Check out more of Comenity’s financial resources.