By David Ning, Founder, MoneyNing
Almost everyone needs to save more for the future, but let’s get real - those people touting 15% or 20% savings just sound insane. I know what you're thinking, "where am I ever going to find 20% of my paycheck to save? If I had that kind of cash, I wouldn't be fretting about money issues in the first place!"
So forget trying to save 20%. Just try to save 1% more than you did last year. That's $500 for a household that brings in $50,000 a year, or about $1.39 a day. That's entirely possible. Are you ready to give this a go? Then try these simple tips:
Bank that raise. Many people get pay increases as they move up the ranks, but the economy is finally improving and most of us will at least get a living adjustment raise. Schedule the increase to go straight into an online savings account as soon as that paycheck gets bigger. You will never miss the increase, and before you know it, you'll have built a sizable stash.
Track your expenses and only keep services truly making you happy. No one ever wants to lower his or her standards of living, but the truth is that you can't possibly maximize your purchasing power by spending money willy-nilly. Is everything you are spending money on contributing its fair share to your happiness?
I was like everybody else and thought cable TV was an absolute necessity. But now that I cut the cord and joined an online streaming service via a free trial, I find myself not spending as much time sitting in front of the TV channel surfing and spending more quality time with my family. Of course, the $90 a month savings didn't hurt one bit either, because I now go out to eat with friends more often, enriching my life even more.
Stay on top of your finances. Once you build up that savings cushion, then it'll be easy to avoid paying overdraft fees as long as you monitor your accounts. Put it onto your calendar to check your balance so you know how much money you can spend, and make sure you add the credit card due dates on there as well to know when payments are due. Managing all this takes only a few minutes a day and if that keeps you from paying ridiculous fees to the bank, the time spent could be the best paying part time job you ever have.
1% more may not sound like much, and that’s precisely the beauty of this approach because you’ll find saving this amount easy. But keep adding 1% to your goal for a decade and you are all of a sudden saving 10% without even trying. Now imagine what you can save if you actually put some effort behind it by aggressively applying common savings tips and saved 2% more every year from now on.