The start of a new year offers a great opportunity to reassess your budget and ensure you're working toward your savings goals. With that in mind, I want to share some ideas of how to find money in your budget to either start saving or increase the amount you're saving.
Reassess (or Establish) Your Budget
First, do you even have a budget? Or are you spending unconsciously with reckless abandon from paycheck to paycheck?
If it’s the latter, believe me – I can relate. I’ve been there, done that, and bought the t-shirt (with a credit card, I’m sure). It’s not that I didn’t want to create a specific budget; I was just completely overwhelmed with the thought of the task.
Fortunately, there are tools available that make budgeting easy.
One good example of a budgeting tool is Mint.com. This free application helps you track how you spend your money on a month-by-month basis. The website is fairly intuitive; it takes only a few minutes to set up – and it is easy to make adjustments. This website also has a feature that sends you automatic reminders. For example, it will let you know when a bill is due, or when you are nearing your budgeted dollars for a specific expenditure. It also will give you a frame of reference that you might otherwise not have considered. For example, if you spend more each month at restaurants than you save for retirement, it may be time to review your retirement savings budget.
"...if you spend more each month at restaurants than you save for retirement, it may be time to review your retirement savings budget."
Consider Where You're Already Saving
Second, let's talk about how you are already saving money (but probably not thinking about it). If you use a grocery savings card, you are saving money. If you are using a credit card with rewards, you are saving money (if, of course, you are paying the balance off each month). If you clip coupons (and remember to use them), you are saving money.
If you are hit or miss when using coupons, or if you’ve never used coupons, this is an easy way to find cash in your budget. I usually save $12 - $15 per week using coupons. And I am committed to only using coupons on products I would normally buy and use.
Have you ever considered tallying the amount you save on a monthly basis? I have a friend who wanted to make a specific home improvement but couldn’t justify the expenditure. During the next year, she tallied the money she was already saving via coupons and reward cards and was surprised to see that the annualized total was greater than the expense of her project. She made that home improvement.
If you don’t think you have the time to clip coupons, I would encourage you to take a look at grocery store websites. They make it extremely easy to download coupons to your grocery card, so you don’t have the hassle of remembering to carry coupons.
If you do have the time, you might also think about sharing unused coupons with friends or colleagues. If you are a parent of school-age kids, you may consider delegating the coupon task to the kids, and adding a percentage of the savings to their allowance.
One last point – if you have extra coupons, try leaving them in the grocery store next to the correct product or, if you spot the product in someone’s cart, simply hand them a coupon. I’ve made a habit of this for years, and if can you help even one person save a few bucks, doesn’t that seem worthwhile?
Implement New Savings Strategies
Beyond couponing and accruing rewards points, there are countless strategies you can employ to help you save money. Here are a few unique saving tips to explore:
- Program your thermostat. A programmable thermostat can help you save money while you're sleeping or out of the house. Your thermostat may have an energy-saving setting. Start there and adjust the settings as needed to ensure that the AC or heat aren't running as high when you're out of the house as when you're home. According to EnergyStar, you can save approximately $180 per year through this one efficiency.1
- Save when you treat yourself. A creative savings tip from Americasaves.org suggests that, each time you spend money on a nonessential item, match that same expenditure in savings. If you treat yourself with a latte while you're out running errands on Sunday, fund your savings account with the same amount.2 If you can't afford to save the same amount, you can't afford the latte. Makes pretty good sense to me!
- Cut the cable. I know it’s a horrifying idea, but cutting cable could save you a bundle in time (who hasn't wasted hours flipping through TV channels at night?) and money. If you'd rather die than cut out TV, explore some lower-cost online streaming memberships that offer their own TV-like programming at a much lower monthly cost.
Give Your Retirement a Raise
Last – and surely not least – consider putting a raise in to your retirement plan. Think of it this way: if you're already saving 6 percent of your salary, and you're able to meet your financial commitments, when an annual raise comes along, simply add that raise (let’s say 3 percent) to your savings plan. You’ve already established you can live on the prior salary – and raising your savings to 9 percent will make a huge difference in the future.
I hope these suggestions offer some insipiration for exploring new budgeting and saving strategies. Keep your mind open to new tips and tricks! With the right mindset, budgeting and saving just might be easier than you think.
Investing involves risk, including possible loss of principal.
The opinions and forecasts expressed are those of the author and individuals quoted and should not be construed as a recommendation or as complete.