You hit the midpoint of you career, peek at your savings, and it hits you: Your savings account isn’t quite where you want it. It’s a gut punch, sure—but it’s a normal gut punch. For many of us, saving money is one of those moving-goalpost, “I can do this next year” plans. But for the back half of your career, for obvious reasons (nicer vacations, sweeter purchases, and a little thing called retirement), procrastinating further on your savings is not the best idea. With this in mind, we consulted an armada of financial expert to compile a compendium of savings strategies; next thing you know, your nest egg will be bigger than ever. And for more ways to boost your finances into the stratosphere, don’t miss the 52 Ways to Be Smarter with Money in 2018.
Assess How Much You Spend
Before you even begin saving, take a deep breath and assess how much you are earning and how much you are saving. Having a clear picture of this is the first step to long-term savings, but is the sort of thing that can easily be overlooked in your day-to-day busyness.
“It 21 days to form a habit,” says Natasha Rachel Smith, personal finance expert at TopCashback.com. “In order for a habit to stick, you have to start somewhere. Build yourself up to a point where you are comfortable with budgeting so the habit sticks. Begin by jotting down your income and expenses and see how much money you have left over every month.” And for more ways to augment your savings, check out How to Earn $500,000 In Your Spare Time.
Turn Money Into Time
A good way to cut down on your spending is to reframe the meaning of cost. Instead of thinking of expenditures in terms of dollars, you might be more likely to curtail spending when thinking in terms of time. “Calculate every expense into amount of time that you would need to work to earn that amount of money,” says Paul Koger, head trader and founder of Foxy Trades LLC. “When I figured out that two Starbucks coffees per day costs 30 minutes of my work when I could just drink coffee for free at work, it was much easier to ditch that expensive habit.”
Save More Than You Think You Can
Whatever you think you can save, there’s a good chance you could be saving more. “Figure out how much of your salary you could save up each month, add 20 percent and transfer it to a separate account as soon as you receive your salary,” says Koger. “This will help you to get by with the money that is left over and help to restrain you from needless spending.” And for more ways to save, don’t miss the 40 Ways to Save 40 Percent of Your Paycheck.
Set It and Forget It
“Have a specific amount of money that is set aside each month—this can be wither a dollar amount or a percentage of your paycheck, for example, 20 percent,” says Robyn, creator of the personal finance blog A Dime Saved. “If you get paid in cash, immediately separate the savings portion and place it aside. Don’t go shopping before having the savings portion in a separate envelope that you won’t spend. Tell yourself that it is not your money. It belongs to your savings account—not to you.”
Pay Yourself a Salary
If you are a small business owner, you probably know the benefits of paying yourself a salary and/or a draw based on the way your business is structured. Paying yourself a regular salary from your business account helps you keep a clear sense of how much your company costs to run, as well as provides a number of tax benefits. Taking a draw involves its own set of distinct tax issues that should be carefully researched before doing, but either option could help ensure you are enjoying some long-term savings. And if you’re still on someone else’s payroll but want to be your own boss, consider striking out on your own by mastering the 15 Savvy Ways to Turn Bad Business Ideas into Good Ones.
Adopt the 50/20/30 Rule
If, after your assessment, you see that you are clearly living beyond your means, it’s time to set down an explicit budget. “When you are new to budgeting, consider adopting the 50/20/30 rule,” says Smith. “Spend only up to 50 percent of your after-tax income on essentials, such as housing; 20 percent on financial priorities, such as debt repayments and savings; and 30 percent on lifestyle choices, such as vacations.” She adds that you should prioritize expenses such as utilities, cable, furniture, and food costs over leisure activities and entertainment.
“By following this rule, you will be able to better manage your finances,” adds Smith.
Turn Challenges Into Fun
Rather than feeling like you have to save, think of it as a game or personal challenge that you want to do. “Start to view mundane tasks, like saving, as a challenge to keep yourself motivated,” says Smith. “When you create a challenge for yourself, you naturally want to fulfill the responsibility to prove you can succeed. Review how much you spent on fees and interest payments alone in 2017 to help you view the bigger picture, budget and challenge yourself to save that much for next year.”
Make it Sustainable
But when setting yourself the challenge of saving, remember to view it as a marathon, rather than a sprint. Just as going extra hard in a workout can get quick results, but prove hard to do every single day, if your savings practices are so extreme that you are having to change your lifestyle in uncomfortable or unsustainable ways, it’s going to be hard to keep it up. Start small and ensure you are putting savings practices in place that you could keep up for years or decades, not just a few weeks.
Watch Those Triggers
Think through your day and where you tend to spend, or in what contexts you tend to pull out your wallet—figure out how you can avoid these places or be more conscientious when you enter them to keep your hand of your credit card. We all spend more than we budgeted for once in a while (or more often than that). But the difference between those who can avoid spending temptations is often just a bit of self-awareness.
“It is important to identify your spending triggers and to avoid situations that will prompt you to swiping your credit card,” says Smith. “Common spending triggers include stress, having a bad day, social pressure, credit cards, boredom or social media pressure.”
Just Carry Cash
While swiping a credit card can feel painless in the moment, you’re more likely to know it when you hand someone a couple twenties for a meal. Get in the habit of carrying and paying with cash and it will very quickly bring home how much you are spending and help you to be more careful to save.
“Microsaving is just what it sounds like,” explains Kevin Han, creator of the FinancialPanther.com personal finance blog. “It’s saving small amounts of money each day or week.” He suggests apps like Qapital, which can round up all of your daily transactions and save your spare change, “basically like a digital piggy bank.” Sign up for a service like that and by the end of the year you will have saved some substantial money without having even noticed.
Embrace Savings Apps
Automatic payroll deductions can often be set up through your employer, but you might also consider dedicated savings apps, which can pull money from your paycheck or your checking account automatically, and can often be better tailored to more wide-ranging savings needs. Sacha Ferrandi, founder and head principal of Source Capital Funding, Inc. recommends the app Digit, which “helps you save money by automatically depositing the optimal amount of money into your saving account, based on your monthly spending habits.”
“When using your bank or payroll company to make this savings deposit, the amount deposited is generally based on a given percentage or a set dollar amount,” Ferrandi explains. “With Digit, its sophisticated algorithm monitors your monthly income and daily spending habits to determine how much money to pull and deposit into your savings account—allowing you to start saving with little to no additional effort or afterthought.”
Give In To Your Anger
Money is often a very emotional part of our lives, so use that emotion to your advantage. Dave Ramsey, author of seven books on money and savings, including Financial Peace and More Than Enough, suggests getting a bit angry at your ballooning credit card bill. “Get to a point where you’ve had it—no more struggling,” says Ramsey. “Whether that means working overtime, getting another job, or selling stuff, you have to get mad at your debt.” For some ideas on a second job to pick up, check out the 20 Side Hustles That Will Put Your Savings on Steroids.
Put an Embargo on Online Shopping
Jennifer McDermott, the consumer advocate for personal finance comparison website finder.com, recommends putting a pause on all of your online shopping, pointing to a recent study finder.com conducted, wherein they found that 88.6 percent of Americans fess up to shopping impulsively online, spending an average of $81.45 per session. “If the temptation of the click is too much to resist, install a forced shopping blocker,” says McDermott.
Look for Better Deals
You’re probably paying too much for many things in your life—whether it’s the Internet, a gym membership, or your streaming services. Do a full assessment of how much you are paying for what and push to get the best deal. For instance, suggests McDermott, “schedule a three- to six-month audit of all your providers to make sure you’re still getting the best deal for your circumstances. Don’t be afraid to ask your current provider to match or beat another offer. Many will go to great lengths to ensure they don’t lose your business.”
Seek Out Freebies
“So many things that we mindlessly shell out money for can be replaced by freebies,” says McDermott. “Walk wherever possible, make your morning coffee from the supply in the office, attend networking events for free food as well as the business connections. Every time you are reaching for your wallet ask yourself: Is this something I should be paying for? If you make this a daily challenge, you’ll be amazed at how much you can save.”
Up Your Automation
However much you are saving via automation, chances are, you can save more. “If you’ve got a savings account that offers automatic deposits, cranking up the rate at which money goes in can help you grow a holiday budget without even thinking about it,” says Kimmie Greene, consumer money expert at Mint.com. “When I need to save money in the short term, I tend to pump up my weekly contributions to my savings account. This helps me lock my money away until I’m sure I want to spend it.”
Cut Down on Outings
Evenings out are important, but you might want to rethink how often you’re going out. Even a drink with friends after work can start to add up when all the costs are considered. “Opting to stay in could help you save more than just the price of dinner,” says Greene. “If you’re in an area that gets snow, the increased traffic will make each trip out burn through more fuel.”
Get Those Coupons and Deals
Coupons aren’t just for old ladies at the grocery store. There are tons of savings to be had through online sources and apps, if you’re willing to put in a little time to track them down. “Digging through your junk mail can be a good way to scoop up deals from local stores,” says Greene. “Local businesses will also offer discounts via local newspapers and magazines as well, so popping by a magazine rack can help you track down deals in your area.”
Look for Overstock
Greene adds that beyond coupons or online deals, there are other places to find savings from independent creators and artists. “Many crafters, artists, and other small creators who own Etsy stores or eBay accounts are also looking to make a bit of last-minute money to spend on their families,” says Greene. “Established creators often put their excess stock on sale in the weeks before the end of the year, and many artists take extra commissions to help them pay for their own celebrations.”
Maximize Your 401k
“The most effective way to save money is to make sure you are maximizing your contributions to your employer’s 401K plan if you are eligible to participate in one,” says Robert R. Johnson, president and CEO of the nonprofit, accredited American College of Financial Services. “Maximizing contributions that are tax deductible is the most efficient way to accumulate wealth for retirement.”
At a minimum, he urges savers to make sure that you are contributing enough to get the maximum employee matching contribution. “If you are offered a match and either don’t choose to participate or fail to make the contribution that will provide you with the maximum match, you are effectively turning down free money,” says Johnson.
Double Check Your Withholdings
This is a small but important area where you could be saving more. Devin Pope, a certified financial planner with Albion Financial Group, suggests reviewing your withholdings on your W4 to make sure it’s correct and up-to-date.
“The IRS has a withholding calculator and can run estimates based on your income and current withholding to see if you may get a refund or have to pay taxes,” says Pope. “One may be able to increase their number of withholdings and receive more in their check each pay period. They can use the additional funds to build up savings.”
Find Free Ways to Have Fun
Getting more creative about how you spend your free time can save you money—and lead you to do something more fun than you might otherwise have thought to do. For instance, “you can spend $10 at the supermarket and enjoy a mountaintop picnic,” points out Adrian Nazari, CEO of Credit Sesame. “Many museums are free, and in summer you can often find cheap or free concerts and outdoor movie showings. Libraries and grad schools host poetry readings (sometimes with free wine and cheese). Going out for ice cream instead of dinner can easily save $50.”
Get Rid of Your Cable
“Cable companies often monopolize an area, which is part of why the bills can get so high,” says Nazari. “Having a month-old SNL episode freeze up on your laptop for the umpteenth time gets old. But one month’s cable bill was almost enough to cover a day trip to visit the Taj Mahal.”
Consider how often you need to watch a live game or show. If it’s just a few times a year, either go to a friend’s place or find a bar nearby where you can catch it where it happens.
Black Out Certain Types of Spending
While sometimes it can be tough to know where to cut spending, it can often be simpler to just focus on a few specific categories and make the decision to cease spending on those altogether, whether for a short period or for a full year—or more.
“Skipping clothes shopping from April through June and September through November can keep you away from impulse buys during sales,” Nazari says. “The same idea applies to perennial purchases, like takeout: Say you order pizza once a week, like we often did. Replacing delivery with frozen pizzas from the supermarket for a month can save $10 per week. Hide the takeout menus four months out of the year and you’ve got an extra $160, without sacrificing convenience.”
Put Your Purchases on Ice
Much of our biggest spending happens by impulse. But just taking a little longer to go ahead with the purchase can lead you to avoid big, unnecessary expenditures or give you the time to find a better deal. Nazari suggests creating a mandatory waiting period for new purchases. “Some experts advise a timeline of 30 days, while others say you should wait one day for every $100 in price,” he adds. “By forcing yourself to take a step back, you’ll prevent a lot of impulse purchases.”
Get an App for That
For the purpose of pausing your spending impulse, finder.com’s McDermott recommends Icebox, a Google Chrome plugin that replaces the “buy” button on the top 20 retail websites and adds pop-up reminders on a further 400 ecommerce stores, suggesting you put those items “on ice,” essentially. “Users have the option to set the cooling period, giving people time to think about whether they should buy their desired items,” she says.
Sell Some Stuff
Go through what you have and what you actually use. Are you actually going to use that old set of golf clubs or that side table you’ve had in the garage for years? Decluttering is not only a healthy habit, it can net you some cash if you put it on eBay or elsewhere. And when you make some money on it, put it in savings. Lynn Toomey, cofounder of Your Retirement Advisor, recommend selling stuff you no longer want in Facebook yard sale groups: “I’ve socked away $500 this month selling these that were sitting in my basement.”
Talk to Someone
“This is especially beneficial in times when the spending is being done without the need to report it to anyone,” says Nate Masterson, marketing manager for Maple Holistics. So get a savings buddy with whom you can discuss your goals and the progress you make on your savings.“It allows a kind of anonymity, which is potentially harmful. It creates a kind of vicious circle, a wall, and many times it cannot be breached and addressed without outside assistance of some kind.”
Write Down Your Savings Goals
“Write your goal(s) down on a piece of paper—or on several papers—and put them up where you will see them on a daily,” suggests Masterson. “Keep your goals (daily, weekly, monthly, and annually) realistic and doable. This is essential, because you want to see some results. And you will.”
Saving is not all about pain. Even if you are working to save more for long-term goals or retirement, be sure to build in some small rewards along the way to reward yourself for reaching or sticking with your savings goals. These should be small treats (you don’t want to reverse the progress you make) but ones that will create a positive, motivating incentive that will help you stick with your goals in the months ahead.
Visualize Your Reward
“Saving for saving’s sake is just not fun,” says Patricia Stallworth, CEO of financial coaching firm PS Worth and the author of Minding Your Money. “But if you’re saving for an exotic vacation or something else you really want, it becomes easier to say ‘no’ to other stuff. Then once you build your saving muscle, you can begin to save for more mundane things like emergency funds and retirement.”
Track Your Spending
“The best way to do that is to keep a record of everything you spend—from bills you pay to snacks at work,” says Stallworth. “By tracking your spending, you can begin to see where your money is going and places where you might be wasting money that you could be saving. So saving can become a better option than just wasting money.” Seriously, when was the last time you really took a close look at where your money goes each week? If it’s been longer than a week, you should be giving your credit card and bank statement a new review.
Rethink Your Transportation
Transportation is a major expense for almost anyone (unless you’re working from home). Consider how you can cut back on your transportation costs, either by switching to public transportation or biking (or even walking) to work. If driving is the only option, consider carpooling, switching to a more fuel-efficient car, or adjusting your schedule so you are driving during low-traffic hours.
Look for a Better Deal on Your Cell Phone
Call your cell phone company and cut back on as many extras as possible. Use Skype for international calls, Whatsapp for texting, and stop using data unless you’re connected to Wi-Fi. If your bill is still high, it’s time to find a new carrier.
Get More Energy Efficient
Cut back on your utilities by taking a number of energy-efficient steps around the house: Insulate your water heater, lower your thermostat in winter and raise it in the summer, air seal your house, and install low-flow shower-heads and faucets. In the long run, this could end up saving you hundreds of dollars—and help the environment.
Get Onto Autopay
Late fees can add up. One of the best ways to avoid them is to switch as many of your expenses as possible to an automatic payment schedule. It may mean keeping an eye on your account balance, but is certain to lead to less spending in general over the long run.
Whether grocery shopping, selecting prescriptions, or clothes shopping, brand names are often overrated (and expensive). Do your research and you’ll find that the generic or non-branded option is roughly as equivalent or effective as the brand name. Go generic.
Shop Off Season
By planning ahead in your purchases, you can bank serious savings. Shop for a winter coat in the summer. Buy those holiday decorations you wish you had this Christmas as soon as the holiday ends. You can often cut about half the cost from off-season merchandise, and will be pleased with yourself when the new season arrives and you’re already prepared.
Just Do It
When it comes to saving, listen to your favorite sportswear brand. “Divert 5 to 15 percent of your income to savings,” Stallworth says. “If you use a budget, add it in just like any other bill. If you don’t use a budget, just take it off the top. The pain will disappear over time and you will adjust your spending accordingly. Then, when you get a raise instead of increasing your lifestyle, increase your savings.” And for more ways to save a little extra scratch, learn the 40 Easiest Ways to Stretch Your Paycheck.
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