How’s your bank balance? It should be healthier than this time last year.
And if it isn’t? Only a few explanations exist for this lack of progress:
- The past 12 months were filled with budget busters such as car trouble, medical co-pays and the need to replace major appliances.
- You were already living paycheck to paycheck, and the increased costs of food and other essentials sent you into the red.
- You simply didn’t make it your business to save.
It’s vital to have an emergency fund and, ideally, additional savings for future goals (replacement vehicle, home of your own, college fund). But these accounts don’t build themselves. You have to take responsibility for making them happen.
Maybe you’ve had bad luck, as noted above. Or maybe you just haven’t figured out how to save. In the short video below, Money Talks News founder Stacy Johnson describes a simple route to successful savings. Get inspired by his tactics, and then keep reading for some more tips.
You’ll notice Stacy began by talking about goals. Simply saying “I want to save money” is a dream, not a plan. Without a specific destination in mind, you’ll probably never get started.
Break it down
So pick a path! A specific need/want is a good start. Suppose $3,000 would put your kid through an advanced music camp this summer. Maybe you’d like to save enough for a reliable used car. Perhaps you and your spouse want to have at least three months’ worth of living expenses in the bank.
Do those kinds of numbers make you feel faint? Start smaller: In the next year I will save $1,000.
Now subdivide that goal: $1,000 divided by 52 is about $19.23 per week, or about $2.74 per day. Thinking in terms of a daily three bucks is a lot more manageable than wondering how you’ll come up with a grand.
As Stacy notes, the easiest way to start is to figure out ways you might be wasting money. Let a budgeting app do the work for you. Stacy likes a free service called PowerWallet. For example, it might reveal that 40 percent of your total food budget is spent on meals away from home.
This kind of wake-up call will help you trim the fat, so to speak.