There’s a constant battle in life between saving and spending money. You want to enjoy life each day with a decadent cup of coffee, but that trip to Jamaica is calling your name. There are some strategies in life that can help you save money while enjoying it at the same time. You simply need to sit down, look at your financial reality and make some plans today.
Stick to a Budget
It’s true that some people don’t even have a budget. Payday comes and goes while spending continues on. Take an afternoon to compare income to spending habits. Based on your needs, create a budget that accounts for everything being spent at this point. You may notice that eating out or other nonessential items are taking the bulk of your extra money. Try to curb or outright eliminate this spending. You might notice that cooking at home is more enjoyable than spending time in a cramped restaurant. Those extra funds can be placed in a savings account so that interest accumulates over time.
Focus on Life Goals
Spending money is exhilarating because you’re receiving a product or service that’s desirable. However, there are many other desirable things in life that are normally out of your spending range. Consider your life goals. Traveling to Asia, or renting a flashy sports car might be on your bucket list. It’s possible to afford these items by adhering to your budget and adding a line item for vacation fun. By making bucket-list items part of your budget, you can eventually save up for them without sacrificing too much on a daily basis.
Don’t Count the Bonuses
A quick way to save money without much effort is banking any bonuses. Income-tax returns, work bonuses and other funds that pop up during the year don’t have to be instantly spent. Quickly move the money to a savings account, and promptly forget about it. Earmark the amount in your savings as retirement, college or vacation funds so that no one is tempted to spend them. Because these bonuses often come in large, lump sums, they can add up fast over the years.
Set Up Automatic Withholding
Most employers have some retirement accounts, such as 401(k)s, that you pay into with each paycheck. If your goal is to save more for retirement, it’s much easier to do by increasing your withholding on the check. This amount is normally in the form of a percentage, such as 5 percent. Some employers even match a percentage going into your retirement account. Take a look at your budget, and increase the withholding to a higher level than before. The savings will grow as the money becomes invested in your company’s financial program.
Expect Life’s Emergencies
At times, financial emergencies may seem to dominate your budget. Saving for anything appears like a huge challenge. Life will have its emergencies, and it’s critical to accept this fact. Try to save some money that’s strictly dedicated to emergencies. Although paying for a popped car tire isn’t exciting, the emergency fund can cover the cost. With this strategy, you don’t have to sacrifice your daily desires or vacation fund. Simply pay a small amount into the emergency fund each month to keep it full for the next unexpected issue.
If you’re in a relationship where income is shared between the entire family, be sure that everyone with access to the account understands the ultimate goals. It may be necessary to divide out accounts, such as a separate checking from a vacation savings, so that money issues don’t become problems. At the end of the day, everyone should be happy with their spending and saving habits.