5 Ways to Save More Money Today
Whenever Career Girls resolve to work toward better financial stability, the question always arises, “How can I save more money?” It stands to reason that for most of us, if we knew where we could save more that we would. Read on for 5 tips for making that happen.
- Know where it’s going. It’s pretty easy to add up the monthly bills you pay – most of those are fixed costs like rent/mortgage, cell phone, utilities, etc. But if you don’t know how about much you spend each month on food, clothing, dining out, getting around and other variable expenses, then it’s nearly impossible to begin to save more. Knowing where your money is going and then putting a few parameters on areas where you might have emotional spending is essential to finding a few extra bucks to save.
- Be strategic with “found” money. Found money is any additional money you receive that you weren’t expecting. This includes things like a raise, tax refunds, gifts, raffle winnings, or even a twenty you found on the sidewalk. Rather than just absorbing these amounts into your spending, be strategic with it. If your raise is only in the 2-3% range, that increase won’t make a huge difference to your lifestyle. But if you figure out how much it increases your paycheck that add that exact amount to either savings or debt paydown amounts, it can make a huge difference. Tax refunds are another easy one. Many people ask me, “Should I pay down debt, contribute to my IRA or buy that new sofa we need?” My answer is, “Why not all three?” Divide your refund by three, put 1/3 toward the debt, 1/3 in savings and 1/3 toward the new sofa fund.
- Max out your 401k match. If your employer matches any part of what you contribute to your 401k and you’re not taking full advantage of that amount, you are leaving money on the table. Increase your contribution to at least get the full match. If that seems too painful to take on at once, then slowly increase your contribution amount by 1% each quarter. If you’re giving 3% today, change it to 4% immediately then in three months, make it 5%. You’ll be surprised at how little you miss that money and your 401k will be growing by double what you’re putting in!
- Take full advantage of other work benefits. If your company offers a Flexible Savings Account (FSA) or Transportation Savings Account (TSA,) you should be participating, even with just a small amount. How do you know how much to contribute? For the FSA, add up what you spend out of pocket on things like contacts, contact solution, co-pays for annual visits and any dental care. You should put at least that much in there. Planning an expensive procedure like Lasik or oral surgery? Plan ahead and set that amount aside in your FSA so that the money you pay will be tax free.
- Get and stay debt-free. The first step here is putting away the credit cards. If you’re unable to get through the month without borrowing against future earnings (which is all a credit card really is,) then it’s time to make some serious changes in your lifestyle. Once you’ve stopped using the cards, make a plan to pay them off. Make sure you’re paying at least the minimum on all cards, then take the card with the highest rate (or lowest balance) and pay as much as you can afford on that card each month till it’s paid off. When that account is paid off, take the amount you were paying on that card and roll it into the minimum of the next-highest rate card, and keep rolling the payments into the next card until you’re debt-free. I can tell you from experience, that feeling of sending that final payment is a freedom unlike any other!
These five tips will get you well on the road to financial security and feeling as though you have choices in life. Remember to be easy on yourself – don’t worry if you can’t tackle all of these at once. But when the opportunity arises, take advantage. You’ll be surprised at how quickly your financial situation can change with just a few small changes.