How to Start Saving Money Every Day
You may have a goal to “save more money” this year. With rising inflation and a world of uncertainty, this desire is not uncommon. According to Forbes, two-thirds of Americans say they’re dipping into their savings as prices for goods and services soar.
As difficult as building your savings may seem, it doesn’t have to be impossible. In fact, saving small amounts of money can go a long way. Continue reading to learn more about the importance of saving, how to set savings goals and how to cut-back on daily spending.
Why Saving Money is Important
We all know that saving money takes discipline, but why is it actually important? Four of the most prevalent reasons to save are unexpected emergencies, planned expenses, retirement and entertainment.
Unexpected emergencies are a part of life, and they often cause a degree of financial strain. In the blink of an eye, you could suddenly need to repair your vehicle, have a medical emergency, lose your job or have a major appliance go out at home. Having funds set aside for unexpected expenses can help provide peace of mind during a stressful situation and keep you from going into debt.
Unlike unexpected emergencies, planned expenses don’t creep up on you. You usually have a fair amount of time to save for planned expenses or goals like a down payment on a new home, purchasing a new car, preparing for future home renovations or building a college fund for your child. That said, not setting aside a portion of your income for these types of savings goals can create a financial burden or cause you to not reach your savings goals.
Planning for retirement is another important reason to save. By steadily making regular contributions to your retirement account, you can actively position your future with more financial security. Talk with your retirement account representative or your employer’s Human Resources department to learn more about your retirement options and how much you should contribute to reach your retirement goals.
Saving money doesn’t just have to be about unexpected expenses or large payments — you can save for something fun, like taking your family on a dream vacation or buying that boat you’ve always wanted. If you purposefully set aside money with these types of expenses in mind, you can make them a reality sooner.
How to Set Savings Goals
It’s often hard to achieve something if you don’t have a clear plan on how to obtain it. The same is true with saving money. Here are some simple steps to help you get started once you have determined your reason for saving.
Define Your Goal
Once you set your savings goal, determine the dollar amount it will take for you to reach it. As you are defining your target dollar amount, keep in mind that some goals may have hidden expenses. For example, if you want to save funds to purchase a boat, you will want to include extra funds for maintenance and insurance costs.
Set a Deadline
Your savings goal deadline will depend on the goal itself. If you’re saving for your general retirement or emergency expense fund, it may take longer and require more ongoing planning than a short-term vacation goal. No matter what your goal dollar amount is, hold yourself accountable by planning to save that money by a specific date.
Track Your Goal
Keep track of how much money you have saved and celebrate your progress. Saving money is not always easy, but seeing incremental successes can help motivate you to continue.
Automate Your Savings
An easy way to save money is to set up automatic transfers from your checking account into a savings account. This option will help ensure that a portion of your money is always going towards your identified goals.
Naming and planning your financial savings goals can help you be prepared for the good, bad and unexpected in life. Now, the last important factor in saving money is lowering the cost of daily life.
How to Cut-Back on Daily Spending
Creating good savings habits for your day-to-day life can add momentum to achieving your savings goals. Since every dollar counts, lowering the cost of everyday necessities can be extremely helpful. Below are three of the largest areas where you can often make substantial spending reductions.
Since driving is such a pivotal part of many people’s daily lives, here are some ways to cut back on gas spending:
- Use a gas rewards card through a grocery store or credit card company
- Fill up on a Monday or Friday — the two cheapest days to purchase, according to GasBuddy
- Compare and find the best price in your area
- Plan your routes so you don’t waste gas
- Use cruise control when possible
- Reduce heating and air conditioning use
- Take public transportation, if possible
Since you can't go without eating, the next best alternative is to discover ways to reduce your grocery bill:
- Pay with a grocery rewards card
- Sign up for a grocery loyalty program
- Plan your meals before going grocery shopping
- Make a list and stick to it
- Clip coupons or utilize your grocery store’s phone app
- Track and purchase sale items
- Avoid expensive or pre-packaged items when possible
Entertainment costs, which can include television subscriptions, internet, streaming services, concerts, sporting events, movie tickets and much more, will vary from person to person. While, you don’t have to eliminate all of these costs, you should consider reducing how much you are willing to spend on entertainment.
- Choose just one streaming service to utilize
- Bundle entertainment packages when possible
- Watch for sales promotions or discounts
- Borrow movies and games from friends and family
- Attend matinee movies rather than prime time viewing options
- Find free or low-cost sporting events
- Lower your internet speed
As you are making efforts to save money, cut costs and still have some fun, make sure you have a place to put your well-earned savings. Opening a savings account with Trustmark is a great option to begin saving your funds. Remember, you can reach your goal faster by enrolling in an automatic payment system to build your savings with minimal work.
Click here for more information about our diverse selection of savings accounts designed to help you meet your unique savings goals.