The darkest days of the Great Recession are long gone, and the economy is gathering strength. But millions of Americans still have a difficult time saving money.
In fact, more than half of Americans have less than $1,000 in savings, according to a recent GOBankingRates survey.
It doesn’t have to be this way. Following are five changes guaranteed to move you closer to savings goals.
1. Improve your self-discipline
A spending plan helps you control the cash that flows into and out of your household. Although it is a simple document, just 41 percent of Americans have a budget, according to a U.S. Bank study.
How to do it: Implement a budget to help tame excessive spending. That way, you’ll have money left over each month to save. For tips, check out “8 Secrets to Building a Budget That Works.”
2. Boost your financial literacy skills
Where did you receive your education about personal finance? Was it from your parents, or the school of hard knocks?
Unless you grew up in a financially savvy household, read a lot of self-help books or had a mentor in your corner at an early age, you’ve been forced to figure this thing out by yourself.
How to do it: If you haven’t learned the basics — such as banking, budgeting, saving and debt management — get started now. You can search for any of these topics here at Money Talks News, and you’ll find endless education and advice. You can also find great resources for everything from getting out of debt to finding a great mortgage rate in our Solutions Center.
Reading personal finance books is another key step to getting your financial house in order. Be sure you consider the reputability and knowledge level of the author before you make a choice. A great place to start is “Life or Debt: A New Path to Financial Freedom,” written by Money Talks News founder Stacy Johnson.
3. Increase your income
Having a limited amount of income to work with month after month can put even the best-laid financial plans at risk. All it takes to blow up the budget is an unexpected emergency, such as a layoff, medical expense or even a simple utility bill.
Of course, earning more money doesn’t automatically equate to a fat savings account. Plenty of people who earn extra money use it to continue a bad habit of spending beyond their means. Maybe that sounds like you — but not anymore.
How to do it: If funds are limited, try to find a side hustle. Or, ask for a raise at work. If you can’t get a pay increase, put in the extra hours on the job to get a promotion. Do what you must to boost your income, then take those extra dollars and save them.
4. Get out of debt
Unfortunately, debt is easy to get into and difficult to get out of.
With the rising cost of living, we tend to charge away instead of cutting back. The end result is that money that could have otherwise been saved is wasted on credit card interest and fees.
How to do it: Yes, getting out of debt is difficult. But “difficult” is not the same as “impossible.” Are you worried that paying off debt in an aggressive manner will strain your resources? Create a balanced plan and execute. Check out “Ask Stacy: What’s the Single Best Way to Pay Down Debt?” for a list of ideas.
5. Pay off student loans
Perhaps you are paying such a large amount of your income to retire a student loan debt that you can barely stay afloat, let alone save money. If so, you need a plan.
How to do it: Reach out to your lender to see which options are available to you. These may include, but are not limited to, payment modification, consolidation, deferment, forbearance, and loan suspension or cancellation. Some of these options merely defer reality, but temporary relief will enable you to stash away cash for a rainy day.
Do you have more tips for boosting your savings? Share them in comments below or on Facebook.
Chris Kissell contributed to this report.
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