Your car breaks down. A tooth cracks while eating popcorn, and your dental insurance only covers a percentage (the smaller percentage, of course). On the scale of financial calamity, the breaking points are different for all of us. But, if you’re like two thirds of Americans today, a $500 unexpected expense is enough to throw you into the hole. If your savings account balance is smaller than your checking account balance, these super saver tips are for you.
1. Super saver DO: create/automate your budget.
Utilize direct deposit to push money into savings FIRST, and generate a budget on what’s left. This helps you get into the mode of saving without thinking too hard about it. From that amount, create a budget for the rest of your spending.
2. Super saver DON’T: deprive yourself today for some imaginary benefit in the future
Saving for retirement is a really, really, really good idea. But it’s far away, and spending $50 on a night out with friends is much more satisfactory right now. To meet both needs, rethink how your spending influences your activities. What if you and your friends had a potluck BBQ instead of a night out? Don’t forget to stuff that savings into your account, too.
3. Super saver DO: Talk to people about your finances
This doesn’t have to mean a financial advisor (although studies show more successful savers do have financial advisors); it can be as simple as talking to friends and spouses about your savings and plans. Whether it keeps saving on the brain or just reinforces those savings goals, talking about finances to anyone has a positive effect on saving.
4. Super saver DO: download the app
A study by the Federal Reserve showed that people who bank over $100K are much more likely to utilize mobile banking. The thought is that it makes it easier to save as well because when people are faced with large purchases, they check their accounts. More than half then opt not to buy it. Schoolhouse Rock was right...knowledge is power!
5. Super saver DON’T: be boring
Boring is a relative term; what we mean is, save some room in your budget for a few splurges. Leave some room in your saving plan to take a trip, upgrade your device, something that truly brings you joy and makes all the budgeting and planning worth it.
What tips do you have for people looking to turn from super spender to super saver?