Some of us are good at saving money, some of us get by and some struggle every single day.
There are plenty of strategies for saving money and paying off debt and it’s important to find one that suits you and your lifestyle.
To get another perspective, I asked Josh Wilson of Family Faith Finance to provide us with 5 different ways to save money every month.
Josh successfully juggles family life and managing finances, which we all know can be tough at times. Here is how he believes people can get better at saving money.
How to Get Better at Saving Money
By Josh Wilson
Between student loans, car and housing payments and the expenses of daily living, saving money can be incredibly challenging for many people. Most schools don’t teach basic financial literacy skills, leaving many young adults without the core knowledge of how to best save for their future when they start out after high school or college.
Learning how to save money can be difficult — but thankfully, you don’t have to do it alone. There are a host of apps, websites, and other programs that make it easier to compare banks, save money automatically, and even invest. Taking advantage of these technological advances can help you on your way to a more secure financial future.
Use an Expense Tracking App
The thought of budgeting is not exciting for most people. Sitting down and figuring out exactly what you have spent over the course of a month does not sound like fun — let alone deciding how you can cut your expenses to save money.
Fortunately, there are a variety of expense tracking apps that make the process a whole lot simpler. These apps will link up with your bank and credit card accounts to track your spending in real time, and will even alert you when your bills are due.
Some of the more popular options include Mint, MoneyStrands, and LearnVest. Each will help you track your spending and will give you a bigger picture analysis of your overall budget, which should help you see areas where you may be spending too much and can make some cuts.
Automate Your Savings
When it comes to saving money, the biggest hurdle for most people is having the willpower to not spend money. Automating your savings removes the temptation to spend it, and puts your cash directly into a savings account, retirement fund, or elsewhere so that you never have a chance to fritter it away. This is a great tip for saving money fast.
There are plenty of ways to accomplish this, such as through transfers from your account into a retirement account or savings account.
You can also use an app that takes your spare money and puts it into a savings account or invests it. Digit and uStash analyzes your account transactions, and transfers extra funds (usually rounding up to the nearest dollar) into a savings account. Acorns works similarly, but instead of putting the extra money into savings, it invests the money elsewhere. These apps can help you build up a nest egg painlessly.
Shop Around for a Better Bank
If you are serious about saving, then you should review your bank’s annual percentage yield (APY), or interest rate, perks, fees and other terms. Choosing a bank with the best options can help you get the most out of the money that you do have set aside — ensuring that your money can work hard for you. The APY is the percentage rate that reflects the total amount of interest paid on a deposit account such as a savings account.
While most savings accounts will not pay particularly high interest rates, online savings accounts tend to offer slightly higher interest rates, often with no fees and sign-up bonuses. Search online for comparison websites to find the best deals for your needs. If you don’t need to visit a brick-and-mortar bank, then an online bank might be the best option for you.
Try a Robo-Advisor App
If you would like to try your hand at investing, then a robo-advisor app might be a great way to get your feet wet. These apps request basic information such as your age, investment goals, and risk tolerance. They will then set up an asset allocation and maintain a balanced portfolio for you.
Make It a Game
Sometimes, the best way to get better at saving is an old fashioned way. Try saving every $5 note that you come across, and when you fill up a jar, put it into your savings account. Ask your partner to join you in a savings competition and see who can fill up a container with loose change first — and then add it all to your joint account. Alternatively, you could try out the 52-week savings challenge which is a perfect way to turn savings money into a challenging game. Having a tangible way of seeing your savings grow can be a helpful way to get better at saving — and can help you work towards your ultimate goals. It’s also a great money saving idea if you’re on a tight budget.
Check out Josh’s blog for some finance advice from a fresh perspective.