For many of us, once we have factored in living expenses such as rent, food, and utility bills, there is often little left over from our paychecks for our retirement, or other future expenses such as home ownership and our children’s education. Living paycheck to paycheck is not ideal either, particularly when life surprises us with unexpected expenses. To have no money to fall back on inevitably adds to the stress.
Saving not only helps to protect us from those ‘what if’ moments, it also prepares us to step up our saving to investing.
Here are 8 tips to get you saving:
- Don’t think about it. The fast pace of our lives can sometimes turn our good intentions about saving to would-haves and should-haves. Set up an automatic or recurring deposit to regularly send money to a savings account. That way, a percentage of your money will be siphoned off for your future before you miss it. Alternatively, apps such as Digit analyze spending habits and put aside small amounts of money on a regular basis to help you save.
- Carry out a personal spending audit. Where can you streamline your expenses and cut back to save a dollar or two? It could be as simple as making your own lunch for work or swapping cable TV for a more affordable on-demand or live streaming service.
- Reclaim cash from forgotten subscriptions. In this modern world you can sign up rapidly for almost any kind of service, but the downside of such convenience is cost can be quickly forgotten too. Truebill is a great way to keep on track of everything you subscribe to, cancel unwanted subscriptions and even request refunds.
- Buy with cash. Handing over crisp, hard-earned dollars for your purchases feels real compared to making easy-swipe card transactions. Decide on a weekly amount of cash you are allowed to spend, take it out of the ATM and don’t fritter it away. Just remember, cash purchases are harder to track, so make sure you know how you’re using it.
- Don’t buy in haste. If you feel the urge to buy something expensive, walk (or click) away from the temptation and think about it. Is it a necessity? Could you wait until it’s on sale? Talk it over with a partner, spouse, or friend, and see if you’re still convinced you need it in your life.
- Check your bank account every day. Informed decisions create wise money habits. If your bank balance is a mystery, it will be hard to know whether to spend or save.
- Take a step back and be financially responsible. Are you living in the right place for your budget, or accumulating unnecessary debt? A good checklist to ensure you’re not overstretched is the Personal Finance Waterfall.
- Make your money work for you. If you are comfortable with the amount you have saved for emergencies and have paid off high-interest debt you may be ready to start investing any excess savings. While this comes with increased risk, low-cost passive investing is an excellent way to build wealth over time and better prepare for your future.
There are many options out there, but if you choose to invest with OpenInvest, you can ensure that your money is working to support your personal values and driving the changes you want to see in the world. As soon as you have a few thousand dollars comfortably set aside (OpenInvest has a $3,000 minimum) you can get started. What started with a mindful approach to saving could now empower you to make changes for good through your investments.
Sign up here to find out more.