If you’re wondering how to save money when you’re just getting by from one paycheck to the next, know that you aren’t alone. In fact, data shows that nearly half of Americans couldn’t cover a $400 emergency, much less pay for the things they want to do, like traveling or buying a home.
So, how do you start setting something extra aside when life keeps getting in the way? Here are a few tips to help stretch your paycheck a little further each month:
- Create a Monthly Budget
The first step to stretching your budget is having a budget. Use our free budget template in Excel to see where your money is going each month. Your budget should include everything from your rent or mortgage payment to the meals you eat out and everything in between. Be especially mindful of the sneaky expenses we tend to forget about, like monthly subscription services. We’d recommend tracking your spending over several months to get an accurate picture of your financial situation, as spending can vary depending on the time of year. First time making a budget? Here are a few more tips.
- Avoid Unnecessary Fees
Some of the biggest money mistakes people make are just from a lack of planning. Late fees on credit cards are a great example. Did you know that a single late fee can be as much as $35? You can simplify your bills by combining multiple debts into a single consolidation loan, so you only have to worry about one payment per month. We’d also suggest setting up automatic payments wherever you can. Another budget drain? ATM fees. While they seem small at the moment, they add up fast. If ATM access is an issue, switch to Summit and have your choice of nearly 30,000 surcharge-free ATMs. Yasss!
- Set Monthly Savings Goals
You’ll have better luck sticking to goals if you quantify them. For example, if you’re wondering how to , start by deciding where you want to go and when. Calculate how much a plane ticket and accommodations would cost. Then, do the math (you can use our savings calculator) to determine how much you’d need to save per month to reach that amount. Whether your timeframe is three months or three years, having a specific goal you’re working toward will help you identify exactly how much room you need to find in your budget. Plus, imagining yourself on your dream vacation will help you stay motivated when you’re tempted to splurge on something in the shorter term.
- Cut Back on Spending Each Month
Once you’ve done the homework to figure out how much you have and how much you need, you can start looking for ways to save in your . Remember: don’t give up everything you love. You still need (and deserve!) to enjoy your day-to-day life. But you’d be surprised how much you can save just by cutting back a little. Try cooking more meals at home, or limit yourself to one coffee per week instead of two. These small changes will be worth it in the end when you see how much you’ve saved, and what you can do with all that extra cash. European adventure? Starter home for two? Or hey, you could even start a business.
Need help finding room in your budget to save for all your lofty goals? Schedule an appointment with a Summit Financial Advisor.