CNBC published an article stating that around 40% of Americans do not have enough excess cash on hand to pay for a $400 unexpected expense. Building up an emergency fund in a savings account can be one way to prepare yourself for the unexpected. Here are seven ways to save some extra money and finally stop living paycheck to paycheck.
Automate your savings.
Ask your employer to setup an additional direct deposit to put money directly into your savings account. Having that money automatically deposited into your savings account takes the effort out of saving and can make it harder for you to spend.
Review your spending.
Take a few moments to review your spending for the prior month. How many times did you go out to eat? How much online shopping did you do? Were those items needs or wants? Calculate how you spent your income last month and set goals for next month. Also, take a hard look at any reoccurring payments that you maybe don’t need, like a subscription box or maybe cable TV.
Special Tip: Set some short-term spending goals, like eliminating all non-essential purchases for the next three months or not buying any new clothes for the next two months.
Wait 30 days.
If you are a big online shopper, add items to your cart and then wait 30 days. Sometimes the urge to make the purchase will pass during that time. If you still want the item after 30 days and it fits within your budget, then by all means – buy it!
Create a shopping list.
Every time you need to run to the store, create a list before you go. Limit yourself to only the things you need, the items already on your list. This can help cut out some of those impulse buys in the snack aisle or at the checkout. Better yet, plan your shopping list around coupons and sales at your local grocery store.
Earn extra money.
Think of new ways to make some extra money. Can you pick up a babysitting gig for a friend? Can you sell some unwanted household items? Can you work overtime at your job for a month? Finding ways to earn extra cash and then putting that money directly into your savings account is a great way to build up your emergency fund.
Save your tax return.
Sure, it’s easy to buy something on your wish-list with the money from your tax return every year. But what if this year you saved that money? What if you saved that money over a five-year period? That money could add up very quickly.
Open a savings account.
Sometimes you may just need to open a savings account. Having a separation between the money in your checking account and the money in a savings account can help divide the account to match your goals. Then, try not to touch the money in your savings account. Keep in mind that when the money in your checking account is gone that month, you have to stop spending money.
Hopefully one of these tips was helpful to you. If you would like to speak to someone about setting up a new account or have questions on how you can automate your savings, call TS Bank at 712.487.3000. Happy saving!