5 Tips to Save Money When Money is Tight
We often have great intentions when it comes to saving money - but something just always seems to come up. Before you know it, those great intentions have taken a back seat to… well life! All the while we continue to spend everything we make, doing nothing to help us prep for our short-term, much less long-term goals.
Saving money can be a slow process. When money is tight, it can be hard to justify putting anything away to "sit" when we really kind of need it now.
We want to help revive those great saving intentions by offering you five quick tips that will help you save more money and make 2021 the year where your good intentions turn to real action.
In this video, Lindsey Rath-Wald, a private banker here at Starion Bank, gives us some great points about the importance of budgeting. Here are five great in-depth tips on this important topic.
1. Create a budget and prioritize
Having a budget is the first step to saving money. Begin by figuring out your daily essential costs, things like your monthly mortgage or rent, food, utilities, and transportation. Then create a budget for these ongoing expenses. This will help you better understand exactly what you need to spend on the things you can’t go without.
Then make a list of the non-essential expenses. This includes things like eating out, shopping, Netflix… you know, the fun stuff!
Put this all into your budget.
After assessing both essential and non-essential spending, dive into the areas where there might be opportunities to save a little money (the goal isn’t to save a lot, it’s to save a little, day after day, month after month!). Maybe you can eat out one meal less per week, or buy your groceries at a more “economical” grocery store.
Lindsey recommends adding the dollar amount you'd like to save into your essential-needs budget. By saving before spending, running into a "there's nothing leftover to save at the end of the month!" problem is far less likely.
2. Think small
Even putting away $10 - $20 per month can make a significant impact on your savings account over time. It’s far easier to save $10 - $20 per paycheck all year than it is to try to save an entire paycheck in December. Think small. It adds up over time! Don't have a savings account? You should definitely open one today! (We can help you do that in just 4 minutes!)
Plenty of banks make it very simple to transfer money from a checking account to a savings account through automatic monthly transfers and sweep options. Consider putting that money straight from your paycheck into your savings account. Because it’s true what they say - out of sight, out of mind! If you can’t see it in your checking account, you are way less likely to spend it.
3. Watch out for those unused monthly or annual subscriptions
Subscription based products/services are as common nowadays as fast-food restaurants, and they’re also just about as convenient and easy to spend money at. However, they come with a downside. As easy as it is to click "subscribe", it's just as easy to forget about those subscriptions as they renew in the background on a monthly or annual basis.
A good rule of thumb is to take a look at all of your subscription services (TV, movies, music streaming services, or even gym memberships) and get rid of the subscriptions you haven't used in the last three months. You probably can’t give up Netflix, but do you NEED Netflix and Prime and Hulu and HBO Max? (If so, so be it. If not, pick one or two and say goodbye to the rest!).
4. If you are a homeowner, this is a great time to refinance your house
Interest rates are currently at an all-time low. Like honestly, it’s almost silly how low they are right now! Refinancing your mortgage could potentially save you thousands of dollars a year. Simply reach out to your local mortgage banker to discuss the different options that could be available. Or connect with one of our Mortgage Bankers directly here!
It's important to remember that there can be fees associated with refinancing your home and these fees could potentially outweigh the savings from the lower interest rates. So before you pull out your checkbook or start signing any paperwork, be sure to speak with a Mortgage Banker to understand your options.
There are plenty of things to take into consideration when thinking about refinancing, and after crunching a few numbers you should quickly be able to see if refinancing is a good option for you at this time.
5. Save now, spend later
Purchasing a used vehicle instead of something right of the lot, or sticking with the same iPhone for another year rather than upgrading “just because you can” are both ways that you could put more money away to take that vacation next year. Delaying these types of purchases can become well worth it when a savings account "saves" the day too.
Life can throw unexpected challenges our way at any time, and sometimes these challenges come with costs. Having some money set aside in a savings account can help lessen the financial impact of an unexpected situation and will help set yourself up for success in the long-term.
A general rule of thumb is that it’s best to have enough money in an emergency fund ( a savings account for those hard times) to cover three to six months of living expenses. While that can may like a daunting amount of money to save - the trick is to start small, stay consistent, and never give up.
Like many things in life, saving money unfortunately doesn’t happen overnight - but over time those 10s of dollars will become 100s of dollars, as your savings continue to grow month in and month out. When the process gets tough, think back to those great intentions. Just turning those intentions into action is a big win in our book! We're cheering you on as you take action to continue saving more money in 2021.
As always, let us know if there is anything we can do to help you in your journey.