Learning how to get myself from broke to having a few thousand dollars in the bank at all times hasn’t been easy, and there are still times when my savings account depletes faster than I want it to, but
1. Control your spending. This really is easier than it sounds. (I know that blouse is really cute, but do you need it? Your kid really likes that name brand cereal, but I can guarantee he won’t be able to tell the difference when you buy the store-brand.) Things like coupons for your normal, must-have essentials will go a long way, as well as planning your meals at home instead of eating out.
Not sure where to start with your spending habits? Fear not: begin by tracking your expenses every day, every penny. (Sounds tedious? Stick with me, it’ll be worth it.)
I personally keep a four-column ledger of our household finances, along with a running balance of our bank and investment accounts, cash on hand, gift cards, etc:
A weekly run-down of these expenses with your spouse can help you both decide what is necessary, what’s fun/okay to spend occasionally, and what spending habits you both need to stop. You’ll be suprised at the ease with which poor spending habits are curbed by simply doing this.
Also, consider using online bill-pay through your bank. It’s an easy way to control when the money goes out, and it keeps your creditors and utilities from billing your account or credit card too early or too late. It will also give you the peace of mind
2. Automate your savings. This is so very easy to do. Most employers will let you use direct deposit a set percentage or dollar amount into a separate account from your savings account. If this isn’t available or you’re unsure of it, set up automatic transfers.
I strongly recommend using different banks for spending and savings. For savings, an online bank that doesn’t have a physical banking location is ideal for this. I personally use Digit, which takes minimal withdrawals and sets them aside for me in a separate account. If I need my money, I simply deposit it back into my checking, and it’s available the next business day. This keeps me from making stupid impulse purchases with my savings.
3. Get a side hustle. Simple moonlighting work can be great to bring in extra income. If you feel you don’t have the right skills, you can learn something simple like computer coding. Other ideas include using Amazon, Etsy, or Ebay to sell items you acquire or make yourself, allowing ads on your personal blog. AirBNB is also a really great way to get some extra cash, especially if you live in the city or near a tourist attraction.
Off the internet, tutoring, a cleaning or handyman business, or (if you’re brave) medical studies are just a few of the ways you can get some extra money in the door to help you toward your savings goals.
BONUS: Try the “52 week money challenge” saving strategy, but do it separately from your normal savings plan. This is really simple. Save $1 the first week, $2 the next, $3 the third week, and so forth. After 52 weeks (one year), you’ll have an extra $1378 in the bank. There are many variations to this plan, too, and a quick Google search will pull these up.