Yahoo Finance 6 Savings Hacks Experts Think Is Easiest
You’ve done your homework and researched how to start saving money. The problem is you want the easiest option available and there are so many to choose from.
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“The key to effective savings in my experience tends to be consistency, so the easiest savings hacks are the ones that allow you to save without needing to actively remember to do so,” said David Kemmerer, CEO of CoinLedger.
Below are the top savings hacks that experts say are the easiest to follow:
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Create A Budget And Save First
Melanie Musson, finance expert at Clearsurance, suggests you should save first.
“Don’t save what’s left at the end of the month,” said Musson.
Instead, she says to prioritize saving and take your savings from your paycheck before you do anything else.
“Your savings need to be realistic. You can’t save 75% of your paycheck and expect to live off 25% for the month unless you’ve worked your way up to that,” said Musson. “So, create a budget and decide how much to save each month, then take that money out first and put it into savings.”
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Kevin Huffman, personal financial expert and owner of Kriminil Trading, recommends paying yourself first.
“Don’t wait to see what’s left in your pocket at the end of the month,” said Huffman. “Set aside a fixed amount upfront–anything you want to save should be treated as a bill that gets paid before you spend on anything else.”
Round-Up Savings Apps
“You could round up every purchase you make to the nearest dollar, and bank whatever you end up with,” said Huffman. “Those tiny amounts add up.”
Dayten Rynsburger, chief revenue officer and co-founder of Niche Capital and Lendermatch, recommends this as an easy approach.
“Use apps that round up your purchases to the nearest dollar and put aside the difference,” said Rynsburger. “For example, if you spend $3.50 on a cup of coffee, one of these apps might round it up to $4.00 and put aside $0.50 into your savings.”
He says this is a painless way to save without having to budget consciously, which you would have to do to save an equivalent percentage of your daily budget.
‘Set It and Forget It’ Strategy
“Take advantage of technology for painless saving,” said Huffman. “Many banks have automatic transfer features that allow you to set aside a set amount each time you get paid into an interest-earning account.”
“The ‘set it and forget it’ strategy means that you won’t have to expend any willpower, and you’ll be amazed at how much you save over time,” said Huffman. “Other options include budgeting apps that track your spending and automatically transfer transactions to categories so you can see where you might be able to cut spending and redirect the money to savings.”
‘No-Spend’ Day Or Weekend
“Have a ‘no-spend’ day – or weekend,” said Huffman. “Once or twice a week, commit to not spending on anything you don’t have to.”
“Plan meals based on what’s already in your pantry, hit up the library or a local park for free entertainment and rediscover the fun of a free activity,” said Huffman. “You’ll not only save money, you might even find a new pastime or two.”
Try Investment Automation
“Setting aside a certain portion after each paycheck takes willpower; people end up indulging in the money,” said Ethan Keller, president of Dominion. “To save and grow your money, automate the transfer so that a fraction of the salary is sent to an investment amount, like a Roth IRA, at a specific time of each month.”
“As regular savings accounts have higher tax rates than IRAs and drawing out money from savings accounts is easier, IRAs are great for surefire savings,” said Keller. “Upon deciding the amount for savings, you can contact the IRA custodian for the routing address to develop an automated system from each month’s salary.”
Save With A Credit Card Limit
“U.S. consumers reach a buying trance and purchase everything on sale, depending on their credit cards,” said Keller. “Although credit card points offer free travel and special benefits, the over-usage hinders savings for the majority.”
“Setting a credit card limit and using cash whenever possible initiates mindful spending and stops whimsical indulging habits,” said Keller, “leading to savings after every paycheck.”
“However, lowering the credit limit on a high-yield account decreases the credit utilization ratio,” said Keller. “Having limited money in the credit card account better balances the utilization ratio.”
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