Work and Money
10 Money Saving Tips for Personal Finance
We have all lived paycheck to paycheck at one point in our lives. But we don’t have to live this way. By saving more, you can increase your financial stability and work toward breaking free from the paycheck-to-paycheck rat race. Most people fall for the myth that saving money has to be a drastic action, but the truth is that every little bit counts. I’m sure we all would like to save more money, and luckily there are plenty of ways to save on expenses today and in the future. Here are some effective ways to generate savings today and tomorrow, and improve your personal finance.
1. Stop Paying Bank Fees
Reduce your banking fees by switching to a no- or low-fee bank account. Many banks offer no-fee programs and allow you to keep several checking and savings accounts open.
2. Monitor Your Bank Account to Avoid Going Overdraft
Limit and control your auto withdrawals to make sure you don’t go into the negative and have to deal with over withdrawal fees. Some banks will even let you set up overdraft protection.
3. Use Credit Cards Wisely to Get Points
If you use rewards credit cards, use them wisely as often as you can to save even more points and cash-back. For example, I have a general cash-back card that I use for some regular monthly expenses. Then I use my cash rewards to help pay for travel and holidays.
4. Cash Is King
We use the cash-envelope system for our flexible-spending categories. It’s easier to stay on track when budgeting with cash, because you don’t have anything extra once the envelope is empty, so you make it work and spend more mindfully. At first, I was using just plain white envelopes, but I ordered some fun, colorful ones that I can reuse every month.
5. The Countdown Is On
Another thing I like to do is budget down to zero each month. I used to leave extra money in my budget without assigning it a job, but I found it more effective to budget and set a plan for every dollar of income that comes in. I recommend tracking your finances with a spreadsheet or my worksheet bundle and mapping out your monthly goals using a planner. Both will help you get your budget down to zero each month.
6. Start Investing Spare Change
A fun way that I like to save and invest (outside of automating) is by using spare-change-saving apps. These apps round up the spare change from my purchases to the dollar and invest the difference. For example, if I spend $4.30 at a coffee shop, the app will automatically invest $0.70 (rounding it up to the nearest dollar). I hardly miss this money, but it adds up over time.
7. Establish Sinking Funds
My bank allows me to have multiple savings accounts where I can save for planned expenses like travel, our pets, large household purchases, and car repairs. I call these "sinking funds" and contribute a portion of our income into these ‘buckets" monthly. I love seeing the account balances grow!
8. Monitor Your Credit
Your credit score is important if you want to maintain a good credit score. Securing lower prices for major purchases such as a car or a mortgage rate can save you thousands. Be sure to keep on top of your credit score with free apps that monitor it. Those will help you save money in the long run.
9. Start a Savings Challenge
Challenge your friends and family to start saving spare change with you. You can set a goal to save $1 a day, every $5 bill you have, or any other savings challenge to help you stash away money more easily.
10. Refinance Student Loans
Are your student loans a heavy load? To help you save money on payments, refinancing may be a good option. Check out student-loan refinance companies to see if this could work for you.
Living paycheck to paycheck can make you feel limited in terms of how fast you can pay off debt and what you can save. The key is to get creative with your budget and how you manage money. Start with these tips if you’re looking to save and also realize that living paycheck to paycheck doesn’t have to be your future. Take steps to start building up your emergency fund, increasing your income, and taking specific actions to improve your financial situation.
Also, check out my Budget Beyond Your Paycheck worksheet bundle to help you stay on track.