Welcome to Money March! This month is all about our finances and how to not fall into the trap of living paycheck to paycheck. Even if you already are struggling with making ends meet, as so many Americans do, learning the basics might be able to help change your mindset about money and start creating better financial habits for yourself and your family. And keep reading for your FREE PRINTABLE SAVINGS TRACKER!
Just like so many other aspects of our life, we KNOW we are supposed to be doing the right thing, but we aren’t always clear on HOW to get started. We all know we should be saving money. But there are times when it can seem hard: maybe because you are barely making enough money to cover your expenses or maybe because you aren’t sure where to put your extra money to get the best results.
Let’s look at the basic steps of starting to save money.
- Track Expenses: Start by tracking every expense you have for a couple of month to start gathering data. Make sure you include automatic payments like subscription services, your bills, even that candy bar you grabbed at the gas station. Whether it is cash or debit card, track every dollar you spend. You can save all your receipts, double check your online checking account transactions and keep a written register of your bank account transactions (See How To Track Expenses). There are even apps you can use to automatically track your expenses if you prefer. The next step is to organize the data into categories. Groceries, gas, entertainment, personal beauty, eating out, etc. Create categories for every expenses and add up the totals of each.
- Create a budget: The next step is to use that information to create the next month’s budget. (See more about creating Basic Budgets). The general rule is to “pay yourself first” and the guideline is to aim for 10-15% of your income. So if you made a $1000 for the month, you want to save $100 -$150 per month. When you list your expenses in your budget by category, I suggest starting with the most important items. The first category should be your savings. Then your home, car, food, utilities. Then your revolving credit, loans, and monthly subscriptions, and then your other categories from your expense tracker. Even if you don’t think it is possible to save the 10% as recommended, that doesn’t mean you shouldn’t save at all. Save as much as you think you can.
- Cut spending: Are you still having trouble coming up with ANY extra to save. Let’s start by looking at your expense categories. It is best if you have several months worth of expenses to look at so you can start to average what you normally spend. For example, our home spends about $160 a week on groceries, although it definitely fluctuates depending on our needs. I budget $160 a week and try my best to keep it low by meal planning (learn more about Meal Planning here). I spend an afternoon creating lists, planning menus and looking on my Ibotta (a great app for getting money back on items you would purchase anyway! Go to Ibotta.com and use my code YOSPXHP to sign up)*(This post is not sponsored by Ibotta, but I do get a small referral fee!) for the best deals so that I only buy what we need for the week and try to keep within budget. At this point you need to figure out what category means the most to you. Are you someone who doesn’t cook much, but loves eating out. That doesn’t have to stop completely just because you are trying to save money, but you WILL have to cut back in other categories. Look for places you can save money. Do you have an old gym membership you don’t even think about that gets renewed every year? Cancel it. Is your cable bill pricey, but really you mostly use your streaming services? Maybe you should get a smaller package or cancel it all together. Actually, if you call your cable provider and tell them you are thinking of canceling, they may even offer you a better price for at time period that might work for you. And don’t use your credit cards either, thinking that doesn’t count. If it causes your monthly bill to go up, it counts! Also, say “no” to people when they want to do something that is out of your financial comfort zone. You don’t have to worry about FOMO (Fear of missing out)…if you save consistently, there will come a time when you no longer have to say no and can go on trips and spending sprees without the guilt others have.
- Set goals: I often talk about setting goals for yourself as it provides you with motivation to keep on the right path. (Learn more about Goal Setting here and Motivation here). With your financial goals, think about the long term and the short term in terms of savings. Make a list or a vision board that will remind you what you are working toward. Maybe you are trying to save a down payment for a house or a car, maybe you want to start a college savings plan for your child, maybe you want to build a large retirement fund for the future, maybe it is all of the above. Once you are able to start saving, even a little bit, open the appropriate accounts for each goal and start working toward it.
- Prioritize your goals: Some of your goals need to be reached sooner than others. If you are looking at short term goals, you may need to save more cash in them for a shorter length of time. Retirement funds or college funds may take longer, so you may not need to add as much to them at this point, but you may want to put any amount you can handle at this time to get started.
- Find the right accounts: Some accounts will have larger interest rates, while others are smaller. Some accounts take a longer period of time, while others are available to you at any time. Some may not allow you access to your money without a fee, while others can be used with a debit card as needed. Find the right account for the right goal, and if it isn’t working for you, switch as needed. (Learn more about Savings Accounts here).
- Create automatic transfers: Instead of worrying about moving the money into the right account yourself every payday, especially if you know you won’t do it when you are supposed to, create an automatic transfer. There are many apps you can use to move you money for you and your bank may offer automatic transfers for free
Remember, any amount of savings is good. You can save all your change in a piggy bank or a jar, you can save cash in an envelope or you can be fully invested with your money, any option of saving is a good start. I have created a FREE PRINTABLE SAVINGS TRACKER just for you. Just click on the link and print as many as you need. The more debt you pay off or don’t accumulate in the first place, the better position you will be in to save money. Saving money is hard, because just like anything else, it can be hard to take care of ourselves first. Think of savings as another form of self care…you are insuring safety for yourself by creating a financial bubble that will pull you through any thing life throws at you.
Make sure you like, follow, and comment down below about how you like to save your money, or what issues you might be having with savings. Follow me on Pinterest, Instagram, and Facebook and look for Being Grown Up on your favorite podcast provider or at Anchor.fm/kim-stamler. XOXO