Advance America: 5 Ways to Start Saving Money Today
LOS ANGELES, December 27, 2021 (Newswire.com) - A great way to create personal financial security in the future is to make saving money a habit. By saving, people can have cash available for emergencies, strive towards their financial goals, and have general peace of mind over their financial well-being.
Luckily, there are plenty of ways to get started on that journey today. Let's dive deeper into 5 things savers can do to learn how to save money:
1. Make a budget
Budgets are powerful in helping save money because they lay out where funds go each month. This can make it easy to set aside some cash to save each month.
Making a budget is easier than it might sound. First, count up all major sources of monthly income, such as paychecks. Then, look at a bank statement and record typical monthly expenses.With this in hand, people can find ways to start saving.
2. Open a high-yield savings account
High-yield savings accounts pay much more than traditional savings accounts. When interest rates rise, these can pay above 2% in some cases. This can offer a nice savings boost, helping to reach financial goals a little bit faster.
These days, plenty of traditional and online banks alike offer high-yield savings. Make sure to compare each one to find great rates and terms.
3. Cut back on subscription services
Sometimes people sign up for subscription services, like streaming services, that they might not use after being subscribed for a while. Over time, as people sign up for more services, the fees can take a large bite out of their paychecks every single month.
Keeping track of expenses can help people go through each subscription service and think hard about how much they use them. From there, they can cut any they don't use. Additionally, they might be able to downgrade to cheaper plans on services they do use and save a few more bucks.
4. Set up auto-savings
Some people might forget to or have a hard time setting aside money for saving. Fortunately, most banks allow auto-transfers from checking to savings. That way, savers can set aside money without even thinking about it.
Additionally, employees may be able to change their direct deposits at work to put a portion of their paychecks into their savings accounts automatically. This could help avoid accidental checking overdraws.
5. Pay down debts
Debt eats away at paychecks and savings by forcing borrowers to make payments plus interest. Paying off debts faster is its own form of savings.
There are two great strategies for paying off debt: debt snowball and debt avalanche. Under the debt snowball method, the borrower can pay off the debt with the smallest principal first. This eliminates one debt quickly, helping to build momentum.
On the other hand, the debt avalanche attacks the highest-interest debt first. This can potentially save more money in the long run, even if the first few debts take longer.
Start saving money today
Starting a money-saving journey doesn't have to be challenging or take a long time. People can start with making a budget and opening a high-yield savings account. From there, cut back on expenses, starting with subscription services.
Once people free up some money in their budget, they can set up auto-transfers to put a set amount of money away hassle-free. Finally, if they have any debts, paying those down as soon as possible can save them a lot of money on interest. By following the 5 steps above, people can position themselves for future financial security.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
Source: Advance America