8 Simple Things You Can Do Today to Increase Your Savings
There is no doubt about it - most Americans are facing serious financial woes. And it's no wonder. In this post on budgeting tips I shared some staggering statistics related to the knowledge Americans have about finance in general - or lack thereof. Add this to the estimates that 78% of Americans live paycheck to paycheck and over 50 million Americans have no emergency savings, according to CNBC, and you have one scary picture of the collective American wallet.
Anyone that finds themselves in this position should absolutely get straight to work delving into their finances, preparing a budget, and setting some achievable money goals. You will not be able to overhaul your financial position, pay down debt or build a formidable savings overnight, but you absolutely can make some simple but effective changes today to set you on the track to financial freedom!
I am going to outline 8 things that you can start doing immediately to build your savings for retirement, emergencies, future purchases (like a home!), or simply to accumulate wealth. While these tips will not result in you becoming an overnight millionaire, they will undoubtedly save you a good chunk of change and get you thinking about additional ways to give your bank account some TLC.
#1 Contribute To Your 401(k)
Over half of Americans have access to an employer sponsored 401(k) plan to save for retirement, but of this group less than half take advantage of the program and make contributions, according to CNBC. Not only are 401(k) plans a great opportunity to sock away money for retirement, they also offer you the ability to reduce your current taxable income and may be matched by an employer contribution.
For instance, if your company matches 401(k) contributions up to 6% of your salary and you make $50,000, you are missing out on an additional $3,000/year from your employer straight into your savings! You should try to contribute at least the maximum that your employer will match to ensure you do not miss out.
In addition to this, it is a good rule of thumb to increase your contribution by 0.5 - 1% every time you receive a raise at work, if you can afford it. Since your paycheck will be increasing anyway, you won't even notice the additional contribution but it will help you big time in the future!
#2 Tweak Your Thermostat
During the first year in our home, we set our thermostat to whatever temperature we felt like - and we paid handsomely for it. During this past year, we reevaluated and kept our thermostat a few degrees higher in the summer and lower in the winter and have saved a ton. We also invested in a smart thermostat which adjusts as soon as we leave the home so we are not unnecessarily cooling or heating the home when we are not there. If I am a little chilly, I will bundle up with a throw blanket or use a small space heater before I reach for the thermostat!
#3 Use An Automatic Savings App
There are a ton of apps on the market that will help you save without even realizing it. Check out this list of 4 money saving apps on NerdWallet to get started. Many of these apps will automatically round up your purchases to the nearest dollar and deposit that spare change into a savings or investment account. Acorns, for instance, deposits the additional money into investments based on income and goals. Digit offers a 1% savings bonus every three months! Do a little reading to see which is best for you and get saving.
#4 Use Discount Apps
Once you have an app to help you squirrel away spare cash, you should download a few others to help you also save money on purchases. I love using Ebates to get discounts on all kinds of purchases that I would be making anyway. I just open the app, select the store I want to shop and go on to make my purchase. Depending on the stores and purchases, you will accumulate cash back and receive a check from Ebates every three months.
I also use apps for my local grocery stores (ShopRite and Stop & Shop) to clip coupons before heading to the store and Ibotta to save on miscellaneous purchases. Ibotta allows you to skim available offers and then share the receipt from your purchases to receive cash back.
#5 Try the $5 Plan
Clark.com has a genius idea for saving spare cash without even realizing it. Every time a $5 bill appears in your wallet, stash it away in your savings along with your spare change. If you frequently use cash, this is a great way to put away hundreds of dollars a year without a second thought!
#6 Revamp Your Weekends
It is easy to spend a ton of money over the weekend on activities, meals out and cocktails. Once or twice a month, try do a "no spend" weekend to keep you on track. Make a list of the totally free activities you can do with your partner, friends, family or solo that you will enjoy just as much as those that have a cost. You can head outdoors for a hike, picnic, walk through the park or camping trip. You can check out a free museum or concert or the library. You can even just invite some friends over for a game or movie night. The key is to make use of what you already have in your home!
#7 Reevaluate Your Subscriptions
There are so many subscription services on the market these days, it is difficult not to get sucked in. There are services for entertainment (Netflix and Hulu), meals (Blue Apron), household products (The Grove Collaborative), personal products (Quip, Lola, Dollar Shave Club), lifestyle products (FabFitFun), snacks (Nature Box), and even stationary (Cloth and Paper). Not to mention magazine and newspaper subscriptions and memberships like Amazon Prime, wholesale clubs, gyms, and website premium content. The list goes on and on!
Many of these are amazing and provide access to companies that focus on only a few products that they strive to be the absolute best at. That being said, it is easy to sign up for a bunch of these over the months without ever reconsidering if it is working for you. I recommend periodically making a list of all of the subscription services and memberships that you are paying for monthly/quarterly/annually and really think about how beneficial the service is. If you aren't reading the magazine, cancel the subscription. If you aren't using the products in a subscription box, cancel it. If you aren't really using the entertainment service, cancel it. Really challenge yourself on this one - it'll pay off!
#8 Shop Seasonally Smart
There is an ideal time of year to buy basically everything. For example, furniture companies generally restock in February and August, so you should make these purchases in January and July when they are trying to clear the floor. Winter coats will be much cheaper in stores when the season is over. Brad's Deals and Consumer Reports have awesome resources for when to buy various items - who knew that December is the time for golf clubs?!
And there you have it - 8 super simple things you can do today to start saving loads of cash. I challenge you to write down this list and make a plan to implement each item to the best of your ability. If you set a goal to fully dive in on another item from the list every 6-7 weeks, you will be in great shape by the end of the year!
Be sure to also read up on:
Your #1 Trick to Earn Thousands of Dollars Toward Travel
7 Worst Mistakes to Avoid When Creating Your Ideal Budget
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