Did you close out 2015 with a little less in your bank account than you would’ve liked? If you’re like a lot of people, you might be disappointed in how much you managed to set aside.
Saving more was the biggest financial priority for 29% of young people, as revealed in a recent survey by Bankrate. The only money issue millennials were more concerned about was paying bills.
Knowing you need to save more and being able to do it are two different things, however. How can you set aside more money when you’re stretched thin as it is? Thankfully, saving a little extra each month isn’t as hard as it may seem. Here are a few suggestions.
1. Pay yourself first. One of the hardest parts of saving money is doing it consistently. You can make it easier on yourself by automating the process.
“Pay yourself first by setting up automatic savings through payroll deduction in your work retirement plan or through automatic transfers through your bank account,” Antonio Morello, the chief investment officer at McMahon Financial Advisors, said. Aim to save 10% to 15% of your salary every year, including contributions to your retirement plan. As an added bonus, those deductible retirement contributions will also save you money come tax time.
2. Spend less on food. Frequent delivery orders and dinners out with friends add up quickly. Save yourself some money by being smarter about how you eat.
“Plan your meals for the week to avoid last minute take-out orders,” Willie Schuette, a financial coach with The JL Smith Group, said. You can also save by buying in bulk and saving leftovers for later rather than tossing them in the trash, Schuette suggested.
3. Cancel subscriptions you don’t use. Do you have a gym membership you barely use or a monthly box subscription you don’t really need? Cancel those recurring charges and funnel the extra money into your savings or to pay down debt. You could end up with a few hundred extra dollars in your pocket at the end of the year.
Have trouble keeping track of which subscriptions you’ve signed up for? There’s an app to help you out. Trim will comb through your credit card statements and bank accounts, find the recurring payments, and ask if you want to cancel the service. It’s free to use, though there’s currently a waiting list.
4. Donate to charity. “Donating to charity is a great way to boost your deductions while helping others,” said Don Chamberlin, a Saint-Louis-based financial advisor and president of The Chamberlin Group.
Donations can come in the form of cash, stock, and even big-ticket items like cars, but you’ll need to itemize and keep accurate records to get the tax breaks.
5. Keep an eye on your credit. Don’t pay more than you have to the next time you need to borrow cash. Maintaining a good credit score “can save you money when it comes to buying a car or anything else on credit, car insurance, or buying a home,” Herb White, a financial planner and president of Life Certain Wealth Strategies, said.
Credit scores above 700 show lenders that you do a good job of managing the money you borrow, according to Experian. You can boost you credit score by paying bills on time, not running up balances on your credit cards, and reducing your debt.
6. Check your withholding. A big tax refund sounds pretty awesome. That is, until you realize that the government is really just paying back the interest-free loan you gave them.
“If you got a big tax refund it means you are having too much taken out of your paycheck every pay period,” Schuette said. File a new W-4 with your employer so that you get more of your money when you actually earn it. Then, shift that extra cash to savings or use it to meet another financial goal.
*Original article source courtesy of Megan Elliot of Money & Career Cheat Sheet.