Saving money is tough. Perhaps you do not earn a lot, or you have tons of debt that is consuming a large part of what you do earn. Either way, figuring out how to still save every month is important and even if the amount that you can save varies from month to month you should prioritize it. The good news is that there is no right way to go about this. Whether you reevaluate your budget and find money from reworking it and cutting back in certain areas or pick up a side hustle to create extra income to allocate towards savings, commit yourself to the process. No matter where you are on your financial journey the thing to remember is that anyone can turn their financial life around at any point. One step in the right direction is all you need to get the ball rolling, and although the first step is generally the hardest, you only have to take step one, once.
1. Move Around Existing Funds
Seeing where you can find savings within your existing budget is a great place to start. While this method requires some discipline and research, it is pretty low maintenance. Loan refinancing is a common way to free up cash. A mortgage is generally the largest loan that a person holds, so if you are not comfortable manipulating something that substantial, you can start on a smaller scale, with your auto loan for example. Finding the best lender for this option can be quick and painless, to submit your application to WithClutch.com takes less than 20 seconds. Exercising this option allows you to renegotiate the terms of your loan, and ideally acquire an interest rate lower than your original loan dictated. This will lower not only your monthly payment, but the overall interest total you pay on the full loan amount.
Now it will be up to you to decide where this newfound money will go, the intent however would be that it is allocated towards savings. Since this is cash you are not used to having to spend in other areas, start the habit immediately of saving it so that you are not tempted. There is no impact to your credit score, and no obligation if you seek out refinance options, so even if this does not end up being a route you choose to take, the information is easy to obtain and leaves you with nothing to lose. You also have the luxury of no real timeline with a refinance search. You can weigh out several options from different lenders and see how much refinancing can save you before you choose the right option. But if your personal financial situation has you on a tighter deadline, you can start saving today with cash or lower rates approved within 24 hours.
2. Make Household Cuts
Strict budgeting is not always the most glamourous approach to prioritizing saving money, but in many ways, it is the most sustainable, and also can simplify your relationship with money and teach you good and lasting habits that will extend past your immediate need to cutback. Finding out that you can in fact live without some budgetary items that you previously did not think you could is freeing. Some examples of places to cut costs that would yield significant amounts would be going down to a one car household if you currently have more than one, putting vacations on hold for a period of time, and dedicating yourself to cooking more and dining out less.
It is also important to realize that if you decide to cut back, there is no right time frame for it. Depending on your household needs and goals, you might only need a 30, 60, 90-day bump to get you to where you need to be, or you might need to maintain this for a year, or forever. Regardless, the essential thing to remember is that this is something you have complete control over and you can adjust your budget as needed as life comes at you in different ways, but try not to lose sight of your overall goal, short term pain can result in long term gain and every little bit counts.
3. Diversify Income and Investments
A sure-fire way to save more, is to earn more. If you are in a position to take on a side hustle in any capacity, it is a great way to not only beef up your personal finances, but also diversify them, so you have some crisis management if something happens with your main source of money. Funneling side hustle money directly into your savings creates an out of sight out of mind nest egg of cash that can remain untouched until it is clear to you how this money should best be used. Since side hustles are highly trendy right now, the possibilities are vast, making this option completely customizable to your existing lifestyle and goals.
Investments are another area that can yield additional cash if they are shifted in certain ways. Moving around investments can feel like a gamble in an unstable economy so if you are not comfortable making these moves without guidance then it is not a bad idea to consult the financial professional in your life for your options before pulling the trigger. If you are a beginner to investing, there are user-friendly ways now to be introduced into the stock market gently and build up comfort and knowledge with small steps.
For example, there are several apps available that will simply round up your change from purchases you are already making and invest that change on your behalf. Since these amounts are small the shift will not feel as large on the front or back end, so understand that the payout may take some time to build up, however you are also putting yourself in a lower risk category but investing at a slower pace. In this same wheelhouse would be moving banks, or account types, to avoid fees, and to take advantage of perks and offers that other banking options may provide you. You are using a bank regardless so it is worth the time spent researching to see if you can find one that will give you incentives to save more. Some even offer sign up bonuses that can be a small bump into your account simply for making a switch.