How to Develop a Personal Savings Plan: 10 Ways to Quickly Save Money
Did you know that nearly 30% of Americans have little to no money saved as emergency funds? Moreover, almost 40 million US citizens live paycheck-to-paycheck. This means that they spend every dollar they make without thinking of putting a few aside for rainy days.
If you want to secure your future and sleep better at night, you need to create a solid personal savings plan. There are multiple ways to save money but most importantly, you need to start doing it today.
Keep reading to learn how to save money and don’t be afraid that a financial crisis might catch you unprepared.
Save 10% from Any Payment You Get
When people receive their salary or any form of payment, they immediately think of buying things and/or paying bills. They spend most if not all their money and then wait until the next paycheck. You should avoid this type of behavior and start paying yourself first whenever you get a payment.
This usually means saving 10% of each paycheck or salary that gets in your hand or bank account. You get the money, you put aside 10% and then you think about buying things and paying bills. You strive to live using 90% of your salary. In a few months, you’ll see a beautiful sum growing in your savings account from the 10$ you put aside.
Automate Your Saving Methods
Many people would save more money, but they complain that they forget to save 10% with every paycheck. If this is your case as well then don’t worry. Many bank accounts and bank apps that run on mobile devices allow you to save money automatically.
For example, you can set up automatic payment and redirect 10% of your income to your savings account on a certain date. By doing so, you don’t have to worry about forgetting to save money.
Furthermore, there are options on certain bank apps to put aside a few dollars from every purchase you make. For example, you buy something that costs 13 dollars, the app rounds this transaction up to $15 and sends the extra $2 to your savings account.
This is an automatic saving option that could save you a lot of time and effort. It helps your savings account grow steadily, based on your buying habits. You can disable this option whenever you want or redirect the money to another account.
Create an Emergency Fund of up to $1,000
When people spend all their money, they usually tap into the savings account for a few days. This is not a big problem because that’s why you have a savings account – to help you in those moments of need.
However, the ideal scenario is not to touch your savings account at all. That’s why you might want to create an emergency fund. This is a fund of $500 or $1,000 that could cater to all your emergency needs. You tap into this fund and leave your savings account untouched, accumulating more interest for you in the long run.
You can build your emergency fund slowly over time. You save a few dollars a week, put aside $50 when you get a bonus at work. You begin with small steps and reach your goal of $500 or $1,000. No matter what happens, this sum of money will help you get over an emergency easier.
Track Your Expenses Every Day
If you don’t have time to write down every pack of bubble gum you buy for your kid, at least monitor the large expenses. There is an old saying – whatever gets tracked, it can be controlled. This is also true for your finances.
If you write down major expenses, you become more aware of them. You don’t spend money willy-nilly and you become responsible to pay for things that you need. You’ll also remember much easier where you spent your money and how much.
Most people keep a small spreadsheet on their phones. They add a major expense right after they have made it. This also opens you the possibility to plan major expenses and make them only when you’re most financially stable.
Cancel Subscriptions and Memberships You Don’t Use or Need
You will be amazed by how many services you are paying for but rarely use or don’t need at all. Many people pay for magazine subscriptions, memberships on various websites, video or audio services that could cost hundreds of dollars every month, etc.
Since you are thinking of ways to save money, take a closer look at the services and memberships you’re currently paying for. Ask yourself if you need these services. If the answer is yes then keep the subscriptions in question. If the answer is no then cancel these memberships.
If you narrow down your list of subscriptions to by 5 or more, you can save at least $100 or $200. This can add up to a few thousand dollars per year in money that could sit in your savings account.
Cut Out Cable TV and Watch Your Favorite Videos Online
Yes, cable TV might contain some of your favorite shows, but people usually pay around $100 for this service only. Are you sure you absolutely need cable TV? This is a good question because most TV shows and documentaries are streamed online on Netflix and other platforms.
Such video streaming services ask for more affordable subscriptions. You can still see your favorite shows and soaps, but you pay less money. On top of that, Netflix and other similar platforms make your favorite shows available on mobile, tablet, laptop, and desktop computers. You have to log in and enjoy your videos while saving a lot of money every month.
Try to Eat Out Less Often and Prepare Meals at Home
Eating at restaurants in town can be entertaining, especially when you’re accompanied by your family members and friends. However, it can also be more costly. Nobody says to stop this habit altogether, but try to reduce its frequency to save money.
For example, you can try eating out at restaurants once during the week and once during the weekend. For the other days, try to prepare a lunch box. Cooking at home can be exciting too.
On top of that, it also allows you to eat healthier and learn how to prepare new and delicious recipes. For example, check out these trending recipes that can boost your immune system and make your taste buds burst with joy!
Reduce Your Energy Bill by Opting for LED Lighting
LED lighting is more economical than incandescent lighting. Today’s LEDs have a longer lifespan, they can be used anywhere, and sometimes they are brighter too. They consume less energy than a conventional light bulb and can help you save money on your energy bill.
That’s why you should replace all the light bulbs in your house immediately. Opt for LED light bulbs and LED light strips that are turned on and off by a motion sensor. If you spend time in your yard or patio during the evening, adding LED lights around your property will help you save more money throughout the year.
Reduce Your Daily Coffee Intake
What has coffee to do with money-saving? Well, if you drink one or two cups of coffee a day, it’s not a big problem. But some people drink at least 3-4 cups of coffee every day and this can lead to major expenses throughout the week.
Whether it’s about the $5 latte or the extra cups of coffee you buy during your work breaks, this habit can become very costly. Try to cut down on your coffee intake and see that you can save $100 a month.
Hunt for Discounts Whenever You Want to Make a Major Purchase
Today’s world is full of competitive retailers that want to attract as many customers as possible. This is true regardless of the product or service sold. The good thing about this is that it allows consumers to enjoy a wide variety of discounts and freebies, particularly if they shop online.
Therefore, next time you want to buy something, shop around and see which retailer offers a better deal. Some companies might sell the same product with a 10% discount. Other companies offer free shipping countrywide.
Spending some time to find a better deal can pay off, especially if you want to make a major purchase. Whether you’re buying a flat-screen TV or a fast bicycle for your kid, these discounts can help you save more money with each purchase.
Now You Know How to Design Your Personal Savings Plan
As you can see, a personal savings plan can be tailored according to your preferences and it includes many little things you can do every day. No fortune is built in one day, so make sure that some of the tips presented in this article become ingrained in your daily routine. This is what will take you out of debt and make you rich.
For more useful financial advice and lessons on how to save money, make sure that you check out the other articles on our website.