Successful Savings

Most Americans are living paycheck to paycheck. In fact, 50% of Americans are living this way. That is a huge number of people who would be in big trouble without their next paycheck.

The key to successful savings is to understand why you’re not saving money.

How does this happen? Well, there are a few reasons that someone may be living paycheck to paycheck:

Living Above Your Means: Living above your means is when you’re spending most of your money to support your lifestyle. Do you live in a really nice apartment or home that takes most of your paycheck? Did you get a car that was too expensive for you to reasonably afford? Do you spend a lot of money on subscriptions, the newest electronics, or the newest clothes? These all add up and will cause you to start living above your means.

Not Having A Savings Goal: If you don’t have a savings goal, then you aren’t able to see the big picture. Not seeing the big picture will make it easier for you to spend money unnecessarily. If you aren’t saving for emergencies or a comfortable retirement, then you will not look at money the same way as other people. You will view your money as a way to buy trending goods and services instead of a way to create a better future for yourself.

Personal Situations: Sometimes personal situations make it very difficult to save money. Maybe you just started a family and depleted your savings. Maybe you lost your job. You might have just received a huge medical bill. There are countless situations that can make it hard for a person to save money. It is important to start saving as soon as possible. Even if personal situations have caused you problems, stay positive and get back on track as soon as you can.

Not Understanding The Importance Of Savings: Some people don’t understand the importance of savings. Saving money is not a topic that is commonly discussed. We live in a society that pushes advertisements for various products. The society that we live in values name brands and keeping up with fashion trends. We are surrounded by so many goods and services that it may be hard to commit to a savings plan. Savings are very important to have. Saving money is more important than making a fashion statement or having the newest phones. Having money saved will make life easier and less stressful.

Fortunately, there are a few ways to overcome these situations:

Create A Budget Plan: Creating a budget plan will ensure that you know where your money is going. You will know how much of your money is going to bills and how much of your money is being spent on things that aren’t necessary. You will also be able to allocate a certain amount of money to your savings account each paycheck.

Create Savings Goals: A savings goal is separate from a budget plan. While a budget plan will help you know where your money is going, a savings goal will set expectations for how much money you want to be saving.

Cut Out Unnecessary Expenses: You may be spending money on subscriptions that you aren’t even using. This is money that is going to waste. Try to avoid eating out several nights of the week. This money adds up. Take a look at where your money is going and cut out anything that is unnecessary. This will give you more money to work with in your budget.

Find Ways To Spend Less: There are other ways to free up some of your money. Try shopping around for the best deal on things you need. Find stores with lower prices for groceries. Go to discount stores for clothes and electronics. Wait until there is a sale if you’re going to make a big purchase. This will save you money. When you are spending less money, you will have more money that can go into savings.

Consider Finding A Job That Pays More: If you can find a job that pays better than your current job, you may want to consider changing jobs. This will make budgeting easier, especially if you are living above your means.

Don’t Spend Your Savings: While it may be tempting to spend your savings, this is not a good idea. You’re putting the money back for emergencies or retirement. One way to avoid spending your savings is to pretend that the money isn’t actually there. Don’t factor that money into your budget. Instead, keep putting money into savings each paycheck and let the money build over time.

Saving money can be a hard task! Try to find ways to save money on purchases, cut out unnecessary expenses, and commit to a savings goal. Avoid living paycheck to paycheck. This is a very stressful way to live. I really hope that this post has helped you! Best of luck.

Budgeting For Beginners

Lets be real, sticking to a budget can be hard work! How can you make a budget and stick to it?

  1. Follow the 50/30/20 Rule

The 50/30/20 rule is a ratio designed to allot how much of your money should be going to different areas of your finances. The 50/30/20 rule is based on your income after taxes. 50 percent of your income should be going to your needs. Your needs are things such a housing, car insurance, gas, food, and other necessary bills you may have. If this category takes up more than half of your income, find ways to reduce this category. 30 percent of your income should be going to things you want such as eating at restaurants, subscriptions, shopping, etc. This 30 percent is designed for the things you want. 20 percent of your income should be going to savings and paying off debt. Saving part of your income will create a great safety net incase an emergency arises.

2. Write It Down

The easiest way to make a budget and stick to it is to write everything down. When you commit to writing down everything you spend money on, including small items, you can see exactly where your money is going. This will allow you to cut back in areas that you are spending too much money on. Get a book or journal specifically for tracking your spending. This doesn’t have to be a fancy book, just find a safe place to write down your spending record. You may prefer to write this down in your phone. Everyone is different, just remember to write down it down when you make a purchase!

3. Don’t Pay Market Price

This is huge! Never pay market price for something you want. Shop around on places like Amazon, Facebook Marketplace, and thrift stores. You can find the same item you want at these places for so much cheaper. If you’re looking for a car, phone, designer bag, video game console, or a TV, check other places first. These items can be found in so many other places for half the price. I’m a firm believer in this. It can save you hundreds of dollars over time.

4. Refinance Loans

Loans vary in interest rates and length. Refinancing a loan could save you money depending on your current interest rate and the length of your loan. Interest is the amount of money you’re paying just to borrow money. Why pay more for a loan than you have to? Something to consider is the length of your loan. Longer loans will be less expensive to pay monthly. However, these loans will be far more expensive overall. If you can afford to pay more money monthly, consider refinancing for a loan with a shorter loan period.

5. Pay Off Debt

Paying off debt will allow you to have more money per month. Imagine no longer having a car payment, a credit card payment, or a loan payment. How much money would that free up during the course of a month? Paying off debt is important for a stable financial future.

6. Don’t Impulse Buy

Impulse buying is very bad when you’re trying to stick to a budget. Follow the 30 Day Rule when you feel yourself attempting to make an impulse buy. For example, if you want to buy a new phone, wait 30 days and think about the decision. If you still want the phone after 30 days, then purchase the phone. I would like to add, while you’re debating buying an item, start saving up for it so that you won’t struggle after your purchase. Remember to look for this item at different stores and find the best deal you can. This will save you money!

7. Set Goals

While you’re following a new budget strategy, start setting goals. Pick debts you want to get paid off in a certain amount of time and try to achieve this goal. Or, set a savings goal. Find a reasonable amount of money to save and do your best to achieve this. Once you have achieved your goal, reward yourself for your dedication.

8. Be Realistic

While you’re on your budgeting journey, be realistic. Don’t set a savings goal that you can’t achieve based on your income. Don’t spend all of your money trying to pay off a debt all at once. Set a budget based on your personal circumstances. Create a time frame that will work for you. Remember, emergencies happen. Maybe your car broke down or you have an unexpected hospital visit. While these things can be frustrating, keep trying. These may be setbacks, but you can still reach your goals. Adjust your goals based on your personal circumstances.

I hope these tips have helped you. I will be featuring more financial advice on my next post. Subscribe with your email for updates on my new posts. Thank you for your support! I appreciate everyone who takes the time to read my content.