Many around the world are struggling to make ends meet, due to the coronavirus crisis. However, there are many easy steps you can take to start saving money today, making things just a little bit easier for you!
Reevaluate Your Budget
As so often is the case, figuring out how to save money begins with a budget. If you don’t already have a budget: you need one. Without it, you cannot possibly understand where your money goes. And there are plenty of easy tools you can use to track your budget, like Mint or You Need A Budget. If you already have a budget, take a second look to try and figure where else you can save a bit of cash.
“Having that kind of visual snapshot of where you stand financially can serve as a powerful in-the-moment gut check when asking yourself questions like, ‘Can I afford it?’ or ‘Is this purchase going to bring me closer to or push me further from my goals?’” personal-finance expert Stefanie O’Connell said.
Use The PYF Method
When taking a look at your budget, look closely at where your money goes. Does it disappear into things like food delivery, new video games, or a pair of expensive sneakers? You might want to try the PYF method, better known as “pay yourself first.” “This is the idea of always cutting out a part of your paycheck and putting it aside before you spend money on other things,” said Samuel Rad, a certified financial planner and instructor at UCLA.
Even if you simply put away $50 a paycheck before spending a dime, that’s $2,400 at the end of the year for most people! Now imagine if you put that money into a high-yield savings account or invested it…
Set Up Smart Saving Goals
So, you want to start putting away money using the PYF method, but not sure how much? Well, to begin, take a look at your budget and pick a safe amount. For most, that’s around 10% to start. However, don’t feel bad if you can’t put aside 10%; any amount is acceptable. What’s important is to become familiar with the habit of saving.
“If this seems too difficult, set up automatic bank transfers for the beginning of every month,” said Carla Dearing, CEO of Sum180. “Think of saving 10 percent as the way you empower yourself to make ongoing investments in your financial health, year after year.”
Take Up Savings Challenges
Saving ten percent each month sound a little too boring for you? Well, saving challenges can be a fun and exciting way to change (and improve!) your relationship with money. “Jump-start your savings campaign with a no-spend month,” added Dearing. “It’s simple: Commit to a 30-day period of spending ONLY on necessities. Walk or bike to everywhere instead of driving, take lunch to work every day, embrace free entertainment options, like exploring local parks.”
“This exercise can make a big difference in your personal balance sheet,” Dearing stated. And that difference can mean everything in these current economic times!
Sources: Bank of America, The Cut