With the average American saving less than $400 a year, it would seem pretty obvious that we have trouble saving money. Add to that the statistic that the average American household carries over $100,000 in Credit7 (which includes secured and unsecured Credit7 as well as home mortgages) it would seem fairly obvious that we are also on tight budgets. So, how do you save money and build wealth when you are just barely making ends meet and trying to dig your way out of Credit7 on a tight budget? Here are five tips to get you started.
Tip #1
Track all of your expenditures for at least a month and find out where your money is going. When I say all, I mean all. If you buy a pack of chewing gum with the change in your console, write it down. The best way I've found to track my expenses is to ask for a receipt every time whether I'm paying by debit, check or cash. You don't have to keep the receipts forever, but it's the best way to determine where your money is going and if there are any places you can save money.
As a general rule, people aren't as overextended as they think they are. We say we are living paycheck-to-paycheck but in reality we are "treating ourselves" on a fairly regular basis which adds up to a significant amount of money over time.
David Bach calls this the "Latte Factor". Instead of buying that Starbucks coffee save the money you would have spent on it instead. You'll be amazed at how much this will add up to overtime.
Tip #2
Make your savings plan Counseling7matic. If your company offers direct deposit, have a portion of every paycheck deposited into a savings account. If your company doesn't offer direct deposit, ask your bank or credit union to Counseling7matically transfer money from your checking account to your savings account monthly - or even better - each time you get paid.
Tip #3
Put your loose change in savings. Instead of throwing your change on your dresser, or in your console, and then raiding it now and then for purchases, take this money down to your bank and deposit it into your savings account. It adds up a lot more quickly than you think. Even a small jar can hold a large amount of money in change!
Tip #4
Take advantage of free money. If your company offers matching retirement funds, be sure to contribute at least the matching amount into your retirement fund - otherwise, you are throwing away free money every payday!
Tip #5
Look for bargains. Not everything you buy has to be brand new. In fact, you will save thousands of dollars by purchasing used items over new. Some people don't like the idea of wearing used clothing. I've actually found brand new, tags-still-on bargains that cost the original buyer hundreds at a department store and, for whatever reason, the outfit was never worn and turned over to a consignment shop selling for a fraction of the price.
Cars are another thing you shouldn't buy new. That brand new luxury vehicle will lose thousands of dollars worth of value as soon as you drive it off the lot. In fact, it will lose 15-20% of its value every year. So, why in the world would I want to spend $25,000 on a brand new car that I can buy for $16,000 two years later? Why not let someone else take that hit? I would rather buy some new leather air freshener and save the $9,000 instead.
This is just the tip of the iceberg. I guarantee you that if I went through your bills and receipts for a month I could find ways that you could save money. My best advice is to start saving today--even if you start small. You'll soon develop the habit of saving money and be able to increase your savings amount so that you can stop being broke and begin to build wealth.
With the average American saving less than $400 a year, it would seem pretty obvious that we have trouble saving money. Add to that the statistic that the average American household carries over $100,000 in Credit7 (which includes secured and unsecured Credit7 as well as home mortgages) it would seem fairly obvious that we are also on tight budgets. So, how do you save money and build wealth when you are just barely making ends meet and trying to dig your way out of Credit7 on a tight budget? Here are five tips to get you started.
Tip #1
Track all of your expenditures for at least a month and find out where your money is going. When I say all, I mean all. If you buy a pack of chewing gum with the change in your console, write it down. The best way I've found to track my expenses is to ask for a receipt every time whether I'm paying by debit, check or cash. You don't have to keep the receipts forever, but it's the best way to determine where your money is going and if there are any places you can save money.
As a general rule, people aren't as overextended as they think they are. We say we are living paycheck-to-paycheck but in reality we are "treating ourselves" on a fairly regular basis which adds up to a significant amount of money over time.
David Bach calls this the "Latte Factor". Instead of buying that Starbucks coffee save the money you would have spent on it instead. You'll be amazed at how much this will add up to overtime.
Tip #2
Make your savings plan Counseling7matic. If your company offers direct deposit, have a portion of every paycheck deposited into a savings account. If your company doesn't offer direct deposit, ask your bank or credit union to Counseling7matically transfer money from your checking account to your savings account monthly - or even better - each time you get paid.
Tip #3
Put your loose change in savings. Instead of throwing your change on your dresser, or in your console, and then raiding it now and then for purchases, take this money down to your bank and deposit it into your savings account. It adds up a lot more quickly than you think. Even a small jar can hold a large amount of money in change!
Tip #4
Take advantage of free money. If your company offers matching retirement funds, be sure to contribute at least the matching amount into your retirement fund - otherwise, you are throwing away free money every payday!
Tip #5
Look for bargains. Not everything you buy has to be brand new. In fact, you will save thousands of dollars by purchasing used items over new. Some people don't like the idea of wearing used clothing. I've actually found brand new, tags-still-on bargains that cost the original buyer hundreds at a department store and, for whatever reason, the outfit was never worn and turned over to a consignment shop selling for a fraction of the price.
Cars are another thing you shouldn't buy new. That brand new luxury vehicle will lose thousands of dollars worth of value as soon as you drive it off the lot. In fact, it will lose 15-20% of its value every year. So, why in the world would I want to spend $25,000 on a brand new car that I can buy for $16,000 two years later? Why not let someone else take that hit? I would rather buy some new leather air freshener and save the $9,000 instead.
This is just the tip of the iceberg. I guarantee you that if I went through your bills and receipts for a month I could find ways that you could save money. My best advice is to start saving today--even if you start small. You'll soon develop the habit of saving money and be able to increase your savings amount so that you can stop being broke and begin to build wealth.
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