Savings Tips You Can Bank On

According to a recent Bankrate Emergency Savings Report, slightly less than half of all American adults have saved enough to cover three months of expenses in case of an emergency. Financial experts tell us that the key to savings is not to make more money, but to spend less and save more. Over time, even the smallest changes in your spending habits can add up to substantial savings.

Saving money can be challenging, especially when you see costs rising on just about everything. However, here are some practical steps you can take to get yourself on the road to financial security:

• Know how you are spending your money — The first thing to do is to take a serious look at where you are spending your money. Many banks and credit card companies offer categorized spending reports so you can get a full picture of your spending habits. Track your spending over the course of one month by reviewing your bank statements, credit card reports and cash receipts. If you are like most people, you will be surprised to find out how much you are spending on subscription services, eating out or impulse purchases. It may be time to give up your $5 coffee shop morning latte and start brewing your coffee at home.
• Pay yourself first — To eliminate the temptation to spend money before you have saved it, set up an automatic transfer from each paycheck, moving money from your checking account to your savings account. After figuring out what your monthly expenses are, determine what percentage of your paycheck should go to savings each month. The remaining amount can stay in your checking account to cover expenses.
• Recognize that saving money begins at home — Take a look at your monthly utility bills to see where you can reduce spending on things such as heating, air conditioning, water or lighting. For example, by switching to LED bulbs, you can save an average of $225 annually. Reduce your water consumption by watering your lawn during the cooler morning hours or by installing low-flow showerheads. Sealing air leaks around windows can shave 10%-20% off your heating and cooling bills.
• Cut back on streaming services — Entertainment service subscriptions can quickly add up to more than $100 each month. There are streaming services that cost anywhere from 50% to 70% less than the traditional cable services. For example, if you are already an Amazon Prime member, you can take advantage of Prime Video, which is included in your membership fee. Libraries in your area may also offer free access to movies and music through apps such as Libby.
• <strong>Look past the brand names — Whether it’s groceries or clothing, consider if you really need to pay for the more expensive brands. When you’re in the grocery aisle, take a minute to compare nutrition labels between the brand-name item and the store brand. It may be surprising to see that there is no difference, especially on pastas, cereals and spices. Take advantage of couponing and promotions to get the most bang for your buck.
• Allow yourself to have some fun — To keep yourself motivated, set aside a small amount of money earmarked for something fun you like to do. It is not realistic to think that you can never again enjoy a night out with friends. As long as you have accounted for it in your budget, you should be able to stay the course toward your savings goals.

One final word: Know that there may be a moment or two when you stray from your savings plan. Don’t let that stop you from achieving your future goals. Just forgive yourself and continue on.

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