5 Money Tips that Help You Save
To establish a solid financial foundation, you have to adopt practices that help you save, rather than spend. If you are having trouble keeping your finances under control, here are a few tips that will help you get on track to saving more and spending less.
- Have an emergency fund. Believe it or not, saving is not as hard as it might seem. For example: If you save just $42 of your income each month, you will have nearly $500 in savings by year’s end. Having a fund for unplanned emergencies is a sound saving practice and could be your saving grace when you have no other means of funding an unexpected expense like a car repair or moving costs due to PCS.
- Understand that budgets are not the enemy. Contrary to popular belief, budgets are not evil. Creating a budget or spending plan is one of the best things you can do for your finances. Here’s why: when you blindly spend money not knowing where it is going, it’s hard to know where you are overspending and where you can save. Creating a spending plan is one of the best financial practices there is. If you don’t know where to begin, begin with this spreadsheet for servicemembers from militaryonesource.mil.
- Don’t buy “just because.” Ever find yourself buying something just because it’s on sale, or just because you have a coupon for it? If you wouldn’t otherwise buy the item, a sale or coupon is a lousy reason to make an unplanned purchase. You may end up spending more than you’re saving because you’re buying something that isn’t planned and can go toward an expense you actually need.
- Limit use of credit cards. Credit cards are ok as long as you limit your spending. The key is to get a credit card with a low interest rate and pay off your balance each month. Why? Because, paying only minimum balance each month might take 5 years or more to pay off what started off as a relatively small balance. To prevent this, limit your use of credit, and increase your monthly payment by 25% of what you owe.
- Don’t worry about keeping up with the Jones’. In our age of excess, many people tend to buy more than they need, but you don’t have to follow that example. If you are living on a limited income, trying to keep up with the Jones’ won’t get you anywhere but in debt. Before you purchase an equally expensive cell phone to the one your co-worker just bought, think about whether you really need all the features it offers - and if you really want to pay $300 for a phone. The same goes for expensive cars, designer clothes and home electronics. If you don’t need them, don’t buy them.
Adopting just one of these practices will get you on your way to a more secure financial future. Go one step further today and take the Military Saves pledge to Set a Goal, Make a Plan and Save Automatically!
- Published: 05 June 2014
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