Yahoo Finance I’m a Financial Expert: Try This Overlooked Way To Save Money
When it comes to saving money, you’ll hear all sorts of advice: Automate your savings. Have a budget. Try a savings challenge.
Admittedly, many savings strategies do work to varying degrees. However, the best one depends on the individual, their preferences and even — to some extent — their goals.
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But what are some often-overlooked way to save money? GOBankingRates spoke with three financial experts to get their thoughts. Here’s what they said.
Most Overlooked Savings Method: Buy in Bulk
“When you’re trying to save money, every little bit helps,” said Scott Lieberman, founder of Touchdown Money. “Cutting back on expenses is, of course, a great way to save.”
But according to Lieberman, perhaps the most effective saving method that doesn’t get as much attention is buying in bulk.
“This is a case of spending money to save money,” he said. “If you have the space and ability to store items properly, buying in bulk allows you to save by purchasing items when they go on sale. If you stock up, you don’t have to buy that item again for a while.”
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Runner-up: Try a Savings Challenge
As the second-best strategy, Lieberman suggested savings challenges.
“Try saving a little at a time and watch your money grow. If you start small, such as a dollar a week, and you add to it each week, you can build a nice savings amount in short order,” he said. “There are popular challenges, like the 52-week challenge and cash stuffing envelopes, where you increase the amount you set aside by the day or week. They sound silly, but if you’re someone who needs more structure or discipline, they can really work.”
You might need to try out several different savings strategies to find the one that works best for you. If you have trouble sticking to one, switch to a new one. Or ask a friend if they’ll try the challenge with you.
Most Overlooked Savings Method: Automate Through Direct Deposit
“In my opinion as a financial expert, one of the best and most overlooked saving methods is automating savings through direct deposit,” said Doug Roller, a financial expert and founder at Crossroads Financial Group. “This method involves setting up an automatic transfer of a portion of your paycheck directly into a savings account before you even have the chance to spend it. By automating your savings in this way, you are essentially paying yourself first and removing the temptation to spend that money elsewhere.”
According to Roller, there are quite a few merits to this strategy, including:
It allows you to save consistently and in regular amounts.
It makes it so you don’t have to remember to set aside cash every month.
It makes saving part of your regular routine.
It limits impulsive or unnecessary spending.
Over time, your savings will add up and help you achieve long-term financial goals.
Runner-up: Monitor Recurring Expenses
And barring automatic contributions, Roller suggested keeping track of your recurring expenses.
“People tend to overlook their recurring expenses, such as subscriptions, memberships, utility bills, insurance premiums and other regular payments,” he said. “These expenses can add up over time and significantly impact your overall financial health if not managed effectively.”
Knowing where your money goes every month can, of course, open up ways to cut expenses. From there, you can start increasing your savings amount and work toward specific savings goals.
Most Overlooked Savings Method: Change Up Your Budget
Having a budget to help you save is nothing new, but if you’ve created a budget and haven’t adjusted it based on your life circumstances and goals, you could be overlooking a key savings strategy.
“Savings goals are often directly tied to the stage of life you are in and evolve over time as goals are met, income changes and life circumstances change,” said Tom Holtam, vice president and senior regional delivery manager at UMB Bank. “For example, in your 20s and 30s, a savings account may be used to ensure you can handle an emergency expense or to reach a goal, such as paying for a wedding or the down payment on a first home.”
“As you get older, savings can help you plan for the future,” he continued. “Having a plan in place to save money for not only a rainy day, but also those short- and long-term goals, is the foundation of financial independence.”
Runner-up: Gamify Your Savings
And if you’re just getting started with saving money, Holtam suggested gamifying your savings. This is similar to setting some personal challenges, but it can make the challenge much more fun and even more rewarding.
“Making saving more fun could be a great way to jumpstart your goals. This idea is called financial gamification — when you create a system of challenges or competitions for yourself in order to motivate and meet financial goals,” he said. “It can turn the everyday tasks of personal finances that might not seem that fun into an enjoyable experience that also give you rewards.”
In particular, here’s what he suggested:
Get some friends together who also want to save up and make a competition out of it. “Set a timeline, establish some rules and whoever has the most saved at the end of the month wins,” he said.
Try not to spend any money for a set period — say, a week. “Challenge yourself to not spend at all for a week,” he said. “This is a good challenge to recognize how often you are impulse spending. Keep track of each time that week that you considered or would have normally spent money and how much it would have been, and at the end of the week, transfer that money into your savings account.”
Every time you spend money, round up your purchase to the nearest dollar. At the month’s end, see how much money you have left over and use it for something else. “When you look at such a small amount of money per purchase, it feels doable to put those extra cents somewhere else,” he said. “But at the end of the month, you may be surprised at how those cents add up!”
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This article originally appeared on GOBankingRates.com: I’m a Financial Expert: Try This Overlooked Way To Save Money
