In America, 69% of adults reported having less than $1000 in a savings account.
With so many people unable to support themselves when things get rough, it’s time for a change. If you are tired of feeling broke and unprepared, you need a plan to start pouring into your savings.
Want to know the secrets to save more money in 2021?
Follow along for 5 money-saving strategies that are guaranteed to pad your pockets in the coming year.
- 50-30-20 Budget Rule
This budget to save money is a simple formula. Of each paycheck, 50% should go towards essentials. This includes necessary bills like your rent or mortgage, groceries, gas, etc.
Keep this in mind when you are in the market for a new rental or car as well as these necessary spending areas shouldn’t encompass more than 50% of your income for the month.
Next is your wants. Things like gifts, clothing purchases, and entertainment will fall into this 30%.
Take special care to adjust your budgeting to accommodate for uncharacteristic purchases. For example, if you usually enjoy spending your 30% on dinners and nights out but decide to go shopping, you would deduct the cost of the shopping from your entertainment budget to stay on track.
And then, of course, we have the 20% remaining for your savings.
- Create an Emergency Fund
Set up a separate bank account and call it your emergency fund. This will be where you turn to if you were to get laid off or had a sudden bill come up like an emergency room charge.
If you are working off of the 50-30-20 budget rule, you can either sink the 20% into this hands-off account or split it between your savings account and emergency fund.
- Automate Your Savings
When you receive your paycheque as a direct deposit, you can actually provide instructions for these funds. Ask to have your deposits split between your accounts and automatically contribute to your savings before you even realize you have the money.
You can instruct a percentage or a flat rate to go straight into your savings. Alternatively, you can also set up recurring payments from out of your main account and into your savings to ensure you don’t skip on your pre-determined transfer.
- Pay With Cash
Tapping away with your card can quickly get out of control, instead, try withdrawing cash and leaving your card at home.
This way, you’ll be less tempted to surpass your original budget plan and more selective about your spending habits. As a bonus, dump all of your coin change into a jar or tin. You’ll be surprised at how much will be leftover.
Keep motivated by imagining all those things to do with your collection of cash.
- Speak to a Financial Advisor
If you’ve got big plans or specific goals to save for, check in with the professionals, and visit a financial advisor. These consultants will be able to look at your accounts and formulate a plan to help you with personalized money-saving strategies.
Save More Money
Take these 5 tips into 2021 with you to up your budgeting game and save more money for the things that matter.
Ready for more on budgeting, finances, and everything money? Follow along with our other articles to discover the spending and saving secrets you need to know.