All of us are different places in our lives, but most of us can agree on one thing. We need to save more money. Perhaps you’re living paycheck to paycheck and worry about not having enough savings for an emergency, or maybe you have some savings but are trying to save up additional funds for a down payment on a home. Do you know where to start, or does saving money feel overwhelming? Primary Residential Mortgage is here to help. These are our top tips for saving money.
You can’t get a clear picture of how much money you can save per month if you don’t know how much your making and spending. The best thing you can do to help you save money is to set a monthly budget and stick to it. Figure out your average monthly income for the past year and then begin to allocate categories for housing, utilities, food, insurance, gas, entertainment, savings, and miscellaneous things. Then, track what you spend and log it in the proper categories. Soon, you can make adjustments where necessary and hopefully start increasing the amount of money you save.
Do you realize that frivolous spending of about $27.40 per day ads up to $10,000 per year! That’s right! If you want to save $10,000, break it down to $27.40 per day. Cut out those two vanilla lattes, maybe take the bus instead of drive to work, pack a sandwich instead of going out to lunch, and boom, you’re there. Try to get in the habit of asking yourself before you buy something if you genuinely need it. Is it the best use of those funds? If not, wait.
One trick to not using your credit cards is to leave them at home in a safe place. If they aren’t with you, you can’t use them. Credit cards should be used for emergencies only. Those monthly interest charges start to add up quickly. If you have about $100 per month in credit card charges, that’s $1,200 per year! Wouldn’t it be nice to save that money instead? Also, pay down your credit card debt faster by paying more than your minimum payment.
Set aside a specific amount or fixed percentage from every paycheck and automate it. Most employers will make a direct deposit right into your savings account. That way, you’ll hardly notice those funds aren’t available to spend. Also, if your employer will match your contributions to a 401k or other type of savings account, do what you can to max out their contribution. Over the years, those funds can seriously add up!
Saving money might sound like a drag, but it sure feels better than carrying the burden of too much debt. Learn to think of saving money as a challenge. See if you can save more money than you did last month. Pull out a pen and notepad and get started on that budget today, and if you have questions, feel free to call us. Primary Residential Mortgage is always happy to help!
Note: Opinions expressed are solely my own and do not express the views of my employer