Having money salted away in savings account ready to pay for an emergency or that special vacation can be a wonderful feeling. In fact, the only way that you can really feel secure about your life is if you have the equivalent of six months’ salary tucked away in a savings or money market account or certificate of deposit. But where would this money come from?
1. Have a goal
The first and most important strategy to save money is to write down some short- and long-term goals. Your short-term goals should be ones you can expect to achieve in a year or less. Your long-term goals would be those that would require five years or longer. For example, a short-term goal could be to get that six months’ worth of earnings in a savings account as this is something you could likely achieve in a year or less. Long-term goals could be to cruise around the world, buy a house, or save for a great retirement.
Why having goals is critical
The reason why it’s important to have goals is because it’s almost impossible to create and stay on a budget without them. Goals are what keep you motivated. If you can see each month that you’re closer and closer to realizing one of your goals, this can be a powerful stimulus for staying on your budget.
2. Make a budget
Speaking of which, the second key strategy in personal finance management is to make a budget. To do this, you’ll need to first track all of your spending for probably a month. Once you see where your money is going, you should be able to find those areas where you can make cuts and free up money to tuck away in your savings account.
3. Pay cash
A third important strategy is to shred all of your credit cards save one and pay cash for everything. You can have one credit card available to use in the event of an emergency or to pay for a larger purchase when you don’t have enough cash with you. However, don’t use it to buy something unless you know you can pay off your balance at the end of the month.
4. Join a warehouse club
Join a warehouse such as Sam’s Club or Costco and buy all of your food there except for fresh fruits and vegetables. You should be able to get these at your local supermarket at roughly the same price as you would pay at a warehouse store. However, these stores are great for stocking up on those everyday items such as paper towels, toilet paper, laundry and dishwasher detergent and canned goods. If you have the space, try to buy several months’ worth of these items at once. You’ll save money on them and on gas by making fewer trips.
5. Get bids on your homeowner’s insurance
Most Americans buy homeowner’s insurance, tuck away their policy and forget all about it. In fact, most Americans don’t even see how much they’re paying for their homeowner’s policy because their mortgage payment is PITI or payment including taxes and insurance. Don’t make the mistake of letting your policy just sit there. Take it out, jot down your limits and deductibles and then ask for quotes from five or six different companies. You may be shocked at what you learn and how much you could save simply by changing carriers.
A sixth strategy: Ditch that credit card interest
Do you know how much you’re paying each month just in interest charges on your unsecured debts such as credit card debts? It may be as high as hundreds of dollars – if you’re deeply in debt. You can turn those excessive interest charges into just one affordable monthly payment through debt settlement. It’s helped thousands of American families save money and become debt free in 24 to 48 months. Call us today to learn how you could ditch that credit card interest and use the money for something that would actually enrich your life.