Thursday, February 9, 2017

Small Savings Tricks that Can Make a Big Impact

Let's talk savings today! I have quite a few savings goals on the horizon so I've been thinking long and hard about what I can do to maximize the amount money I put away each month.

A lot of people get overwhelmed when it comes to meeting savings goals or just beginning to save money altogether. Especially when most sources will say that you must have 3-6 months of living expenses saved at all times or you are basically committing yourself to living in a cardboard box down by the river if you ever lose your job.

And if you already have something like that in place, you may have other things you want to save for like a vacation or big purchase. Personally, I'm saving for a new computer, spending money for my BFF reunion in Alabama, and RAGBRAI.

While it is important to save up money to float you in the case of an emergency or for other goals, it doesn't have to be scary to start that process! In fact, it can be kind of fun to challenge yourself to meet the goals. Here are a few quick tips to go ahead and jump on that savings train.

1. Automate a Small Savings Contribution

Many times people feel that if they're not putting gobs of money towards a savings account each month that it's not even worth it. This is not true! Obviously the more you contribute the faster you'll reach your goal but if you need to, start small! Is there an amount that you wouldn't really miss from your weekly or monthly budget? Maybe you think you wouldn't really notice $5 per week, set up an automatic transfer and away you go! At the end of the month you'll have $20 more than you did before.

2. Put Any Extra $$$ Towards Savings at the End of the Month or Your Pay Cycle

The way that I do my budget, I have a set amount to spend each paycheck and any amount that I am under budget the night before I get paid goes right into savings. Literally sometimes this is $2-$3 but it always goes in. And being in the habit makes it easier to do when I'm $50 or more under budget, rather than subconsciously trying to find a way to spend it.

3. Review Your Savings Plan Regularly

When I started my weekly transfer, I had $5 every week going to savings. But as time progressed, I would look at my account week after week and realize I could increase that contribution. Now I have $15 going into my savings account each week. I started that weekly transfer about a year ago because I felt like I was spending at least some of my money on dumb stuff that could easily be eliminated if the money just wasn't there. Now instead of an extra $20/month I have an extra $60/month.

Personally, I use the weekly contribution and the end of pay cycle contribution to bolster my personal savings that helps me pay for things like traveling to see my two best friends, clothing, personal entertainment, etc. For our joint savings (aka Emergency Fund) we have a slightly different approach but also include the end of pay cycle method as well (more on that another time).

What tactics do you use to save money? 

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