Saving For Your Future

It’s always the right time to start saving. But don’t worry, it’s easier than you think! 

I get it. Just as each individual is different in her own way, so are her specific circumstances. Some women are thriving, some are struggling, and some may be looking at the current economic landscape and deciding it isn’t time to shake the boat. 

If there is one thing we’ve all learned in that last year it is that tomorrow can change in an instant. Today’s blog was written to give you some tips to help ensure you are prepared for the future with some money in your savings account so you won’t be caught off guard in the future.

I want to be clear on something though. I am not preaching about any get-rich-quick schemes. When it comes to your finances, you can only control two things:

  1. How much you spend.
  2. How much you save and invest.

Saving money may feel like an endless cycle of going nowhere, but there are tips to help you see the light at the end of the where-does-all-of-my-money-go tunnel. 

I understand after you pay all your bills, it’s sometimes an impossible game of catch-up to save money and still be a functioning adult; one who treats herself to a Starbucks latte every so often.

Start by creating a budget. Take a half-hour, open up a Google Sheet, and start noting all of your monthly expenses. Seriously…everything. Even that cute outfit for your cat that made its way into your cart at Target last Tuesday? Yup, write that down (under “fun”, not “necessary”.) 

You want to detail all of your essential and discretionary expenses for a full month’s time to get an accurate picture of where you’re at financially. This exercise may show you that there isn’t anything leftover at the end of a month to put away into a savings account, and that’s okay. There are ways to fix that. This exercise is designed to help you take a look at your current lifestyle and make some hard choices when it comes to wants and needs. 

Think about it. Do you really need that fancy coffee three times a week? What about the monthly car wash subscription you never use? Try to think about four to five ways you can save $5, $10, or $20 each week and write those down. 

Tips at the Grocery Store: 

  • Review everything you plan to buy on your list in advance and consider buying generic or store brands for certain items.
  • Don’t buy things in bulk and stock up on a regular basis. Just buy what you need for the week. This way, you’ll reduce waste and avoid ending up with food you don’t eat. (This goes against everything I’ve been doing lately, but it’s a good tip to save in the short-term nonetheless.)

What To Do With Those Non-Essential Stops: 

  • Hit pause on that handbag or shoe purchase for now.
  • Don’t go inside the gas station when you stop for gas. 
  • Does your child really need to go inside the dollar store with you? You know you’ll end up putting five extra items in your cart if they’re in tow! 

Evaluate Big Purchases:

  • If you’re about to make a big purchase, say for a new computer or dining room table, shop around before you buy. You might find a better deal somewhere else or you might realize that the cheaper model actually has more of the features you want than the more expensive one.
  • Make a list of all the big home improvement projects you want to get done this year and see if they’re really necessary right now. Before you drop the money for new kitchen countertops, make sure you have money saved in case the water heater goes out. You’ll thank yourself when something unexpected happens and you won’t have to stress about where the money is to pay for the necessary home improvements. 

The bottom line is, you don’t have to starve yourself in order to grow your savings account. Chances are there are one to two subscriptions or spending habits you can eliminate from your budget right away to give you the comfort of knowing you have a little cushion in your savings account. Once you have a better understanding of what you like to spend money on, then you can work on adjusting those habits.

Budget Exercises

One popular budgeting exercise is using physical envelopes to store your discretionary cash in for a two-week pay period or a month’s timeframe. That way, you can physically see how much money you have left to spend in specific areas. Once an envelope is empty, you’re done spending in that category for the time being.

Another popular budgeting exercise to try and save more money is to automatically deduct a specific amount from your paycheck and have it deposited into a savings account so you aren’t tempted to spend it. You’ll be able to breathe easy knowing that your savings are safely tucked away.

If you’re REALLY serious about starting a savings plan, here are some general rules of thumb that have been proven successful. 

The 50/30/20 Rule

  • 50 percent of net monthly income should go toward needs such as groceries, housing, utilities, health insurance, and car payments.
  • 30 percent should be allocated for wants such as dining out, hobbies, and shopping.
  • 20 percent is to be saved. Seriously…don’t touch it!

Duplicate that Google Sheet budget you created earlier, plug in some formulas, and see what your current percentages are for those three categories. If they’re way off, try moving things around and see where there are places you can start saving. Think about the subscriptions you have, the number of times you eat take-out, or where you’re being charged unnecessary fees. 

The 28/36 Rule

  • Households should look to spend roughly 28 percent of monthly gross income on total housing expenses and no more than 36 percent on total debt service including housing and car loans. What does your budget look like? 

 

Hopefully, the above tips have allowed you to begin thinking about ways you can save money right now! Ultimately, keep it simple when it comes to trying to save money. If it’s too complicated, you won’t stick with it.

And remember, there’s no instant success. Follow saving and spending best practices, be consistent and intentional, and – above all – be patient!

Find the motivation to move forward with saving money for your future. Start by tackling one tip at a time. You’re the one in charge of your money so only you can make the first steps to changing the way you live to make progress saving money. 

Xo 

Lori Larsen

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