How can those who currently aren’t saving afford to save money? And how can those saving only a little save more? Here are our top ten tips for saving money when budgets are tight.
Keep a careful record of all of your spending for a month. You may be surprised to learn how much you are spending on dining out or impulse purchases. One method is to save all your bills and receipts over the month and stack them into categories like “utilities” and “groceries.”
When you compare prices at different stores before making a purchase, you can often find lower prices for necessary purchases — such as food, transportation, and insurance— leaving you more money to save. Bonus tip: Take a list with you to the grocery store and stick to it. This will help you from buying items you don’t need.
Limit spending for birthdays and holidays, especially Christmas. Friends and family are more likely to appreciate a few well-chosen gifts than a more costly pile of gifts chosen thoughtlessly in a shopping mall spree.
For many people, that could add up to well over $100 a year.
The easiest and most effective way to save is automatically. Even as little as $10 or $15 a month helps. After all, that’s $120 or $180 a year. Learn more about saving automatically here.
Emergency savings are usually best kept in a savings or share account, despite the low interest rates these accounts pay, because they are easy to access when you need it. Remember, keep a high enough balance in the account to avoid monthly fees. Learn more about saving for emergencies here.
Payday loans typically charge interest rates of 500 percent, and the interest rate on credit card debts can run 25 percent. You can save hundreds, perhaps thousands, of dollars a year by paying off these high-cost debts. Learn more about how to get out of debt.
Many low- and moderate-income workers qualify, each year, for an Earned Income Tax Credit that can be over $1,000, and often more than $2,000. IRS Publication 596 explains how to apply, or you can contact your local tax payer assistance center for in-person help. Then pay down debt and save with at least half of the money you receive from this credit.
In return for attending financial education sessions and agreeing to save for a home, education, or business, you typically receive $2 for every $1 you save through an IDA program. So, saving $25 each month could end up as $900 at the end of a year. Find an IDA program near you.
Some employers match up to 100 percent of your contributions. If you’re not contributing up to their match, you’re leaving money on the table. Learn more about saving for retirement at work or on your own.
Looking for more savings tips? Here are over 50 additional tips for reducing spending and increasing savings.
Are you ready to make a commitment to save money or pay down debt?
Take the America Saves Pledge to receive emails, text messages, and savings challenges to support and motivate you to save or pay down debt. Consider us your personal savings system. And the best part is it’s completely free.