Many of us may have resolved to save more in 2021, but sometimes it can be hard to get started. Here are some money-saving tips to get your savings started strong in 2021!
Automate your savings
One of the easiest ways to save is by automating your savings. This can be done in two ways. First, you can have your employer deposit a portion of your paycheck into your savings account. You usually can specify either a percentage of the paycheck or a dollar amount. This can make saving more “painless” by putting away money before you ever see it.
Second, you can set up automatic transfers from your checking account to your savings account at specified intervals. This is another way to take the guesswork out of saving by having a specific amount transferred at the same time each month.
Treat your savings like a bill
Bills are when you pay others – savings is like paying yourself! Many people fall into the trap of thinking “Oh, if I have extra money left over, then I’ll save it.” Before we know it, that extra money has disappeared! Treating your savings like a bill ensures that you will make saving a priority and a habit. You can even set up your savings on “auto-pay” by setting an automated transfer each month (see previous tip).
Round it up
When using cash was more common, many people had a “penny jar” where they would save change from their purchases. Now that more people are using cashless forms of payment, that “spare change” just ends up getting spent. You can reinstate the “penny jar” form of savings by using a round-up app such as Acorns. These apps will round up your purchases to the nearest dollar and deposit the change in a savings or investment account. This is a great way to save a little at a time – which can add up!
Save larger chunks of money that come your way (tax refund, bonus, stimulus)
For some of us, these payments are immediately needed to pay for urgent expenses. However, if you have a little flexibility, consider saving a portion or all of periodic payments you may receive such as tax refunds or stimulus checks. It can be tempting to see these payments as “fun money” as they aren’t part of your regular paycheck. However, tucking them into savings instead is a great way to build your savings by leaps and bounds.
Create different “buckets” for savings
It may be helpful to differentiate your savings by purpose. You will want to have, at the very least, an emergency fund (with ideally at least 3 months of living expenses). However, it is also good to save for things like periodic/seasonal expenses. Most banks will allow you to create divisions within your savings account that you can then earmark for different purposes. This is also a great way to save for something fun, like a vacation or major leisure purchase.
You’ll find implementing some or all of these money-saving tips for 2021 will help improve your financial health! If you need expert help organizing your finances to prepare for the future, check out our Financial Health Plan. You can also try our online financial analysis and financial action plan via IRIS, both completely free.
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