When you’re living paycheck to paycheck, saving can seem impossible. Luckily, we’re here to help. Below are five ways to save (and earn) even more in 2016:
- Start at the bank account. Evaluate your monthly spending. It’s amazing when you take a deeper look at your monthly expenses how much you’ll find you spend on miscellaneous things like coffee or dining out. It may not seem like it, but these are both luxuries. Place a limit on how much you spend on these activities each month. If you make a goal to not spend more than $30 on dining out a month, but you instead spend $50, reduce your budget for the following month. Conversely, if you don’t spend your dining out budget for a couple months, take that amount to splurge on yourself one month. You could also use what you don’t spend on your budget to increase your savings account.
- Skip the extreme couponing. After all, as we reminded you above, time is money, and this type of discount searching can absorb a lot of time in order to reap a benefit. Instead, use that time for other activities such as spending time with family (priceless) or researching smarter ways to invest your money (also priceless with the potential to gain). This is not to say utilizing a coupon or two will not help decrease costs; just know there are other ways to save while grocery shopping.
- Adjust your spending choices. What financial goals do you have for yourself this year? If the answer is none, it may be time to make some for yourself. Examples include wanting to save more money, finding a profitable investment, earn more money, etc. Whatever the goal, be as specific as possible. A rule of thumb is to save 20% of your income. So, if you bring in $1,800 in a month, $360 should go into savings. If this seems impossible (and by following rule number one, you may find that it’s actually quite feasible) shoot for 10% and increase by 1% each month. Regardless, at the beginning of every month, fund your reserve accounts after paying your bills so that you can have a little more financial freedom in the following weeks.
- Pay off your debt. Investing does not have to be in stock; you can also put money toward your debt, and in fact, you should work on paying off your debt first. If financial freedom is your ultimate goal, monetary obligations will always hold you back. Obviously, the more you earn, the more you can close out these bills. Earning more, however, is the ultimate challenge. But, in today’s world, it is easier now more than ever to make a side income, whether it’s through Uber or Lyft, selling on Ebay or, yes, even blogging, the possibilities are seemingly endless. As you earn more, though, save more so that you can reach those economic ambitions much sooner.
- Choose investments that will pay you back. If you’re contemplating purchasing rental property as a means to make a secondary profit, know the costs such as insurance, maintenance and taxes prior to going in. Also know that your time may be an investment as well. Increasing the rent will not solve your problems; increasing your knowledge will.
The ultimate goal is to improve your net worth, and through these efforts, you can accomplish this. Decreasing your debt, starting a retirement account and feeding your savings account are all important to do. You will need to work smarter, hustle and research; but with consistency, you can pull yourself out of financial worry faster than expected.
Photo: Flickr: Pictures of Money