Warren Buffett, the world-renowned billionaire and financial expert, advises:
“Don’t save what is left after spending; spend what is left after saving.”
Saving money is about more than dropping your spare change into a jar on your coffee table (though that's a good start). It's about having a plan to manage your money responsibly - a plan that you can reasonably maintain successfully both now and in the future.
Prioritize Getting Out of Credit Card Debt
For many people, credit card debt is the main factor that makes it difficult to set aside money each month into a savings account. When you carry a balance on your credit cards, your interest rates are much higher than the interest you can earn on money in a typical savings account. That means that your credit card interest debt is costing you more than you can earn in savings interest.
So, it makes good financial sense to focus on paying off your credit card debt as soon as possible. If you owe a substantial amount in credit card debt and feel that you are unable to pay it off in a reasonable amount of time, it may be time to consider getting professional debt help.
Call a ClearOne Certified Debt Specialist at 888-340-4697 to discuss your unique situation, explore your options, and get a personalized debt plan today.
Once you see the solution to your debt situation, it's time to turn your attention to reducing your expenses and building your savings following these steps:
Recording Your Expenses and Cutting Spending
You need to know how much you spend and where your money goes. Track every cent you spend and organize your spending into categories, such as utilities, groceries, etc. You can use bank statements and credit card statements to double-check your numbers.
Once you know how much you spend on everything, you can figure out ways to cut spending. For instance, consider the following proven ways to save on common expenses:
Food:
Monthly Recurring Expenses:
Entertainment:
Miscellaneous Shopping:
Creating a Workable Budget
Draw up your spending plan based on your income and stick to it. Do not leave out anything, and be sure to factor in occasional expenses. With proper budgeting, you can save around 20 percent of your income.
Setting Goals
To keep yourself motivated to stick to your budget, set yourself a savings goal. Cold, hard cash is nice, but it may be more motivating to think about your savings in terms of other, more enjoyable things, such as:
Make sure that your goals are achievable. Seeing yourself getting closer and closer to your goals over time will help you stay motivated to continue on your path and reach your ultimate goal of financial independence.
Choosing the Right Tools for Saving
For short-term savings, some people find it helpful to set their checking account to automatically transfer a certain amount to their savings account at regular intervals so that they are not tempted to skip a savings payment.
You may also enjoy using a savings app that automates the process of saving for you. Popular savings apps include Qapital and Digit. Regardless of the tool, the one that will best help you stick with your savings goals is the right tool for you.
If you are currently struggling with credit card debt, you can start saving by addressing that debt. Talk to a ClearOne Advantage Certified Debt Specialist at 866-481-1597 to discuss what your best debt relief options are. Get a free savings estimate and see how much you can save today!