Whether we do it or not, we all know that we need to put away a sizable chunk of our earnings each month to save for our future. When we first start out in adulthood, the goal for many is to buy a house and then save for retirement. Our goal is to find ways to save more money each month.
While the financial products you use to save for each of these will be different, for example, you’d use a pension to save for retirement, but likely just simple savings account to save for a house, the techniques you use to fund them are the same.
Saving over the long term, and not just for a short term goal like a trip abroad or a new game console, requires commitment and discipline. Thankfully though, that doesn’t mean it needs to be difficult. There are plenty of quick and easy ways to save more money each month.
Ditch Expensive TV Packages
Let’s face it, you probably have a cable TV package that offers hundreds of channels, but in reality, you probably only watch a dozen or so. The average American spends around $217 each month on cable. That’s more than all their other utilities combined. This means anyone looking to reduce their household bills will likely make the biggest difference with just their cable bill.
You typically can’t ditch cable altogether, as, without it, most people can’t get access to the internet. That said, you may not need everything the company has to offer. For example, if you’re renting your router from them, you’ll be paying around $10-20 each month for a device that costs around $100 to buy outright.
Additionally, you can likely get away with not paying for TV since there are now many other ways to watch the content you love.
Like Netflix, Hulu, Amazon Prime, and Disney+, Cheaper alternatives offer you thousands of hours of blockbuster movies and TV shows for around $10 per month. You could even alternate between them every few months to give you more variety over the content you get access to while spending less.
There are even plenty of free streaming services you can use too. For fans of card games, PokerStars TV broadcasts coverage of live events, online tournaments, and interviews with players. Meanwhile, fans of anime can find thousands of classic and original content on Crunchyroll.
One of the biggest hurdles to saving is the physical process of putting the money aside. Having to manually transfer money often means that saving gets forgotten about, or you may choose to skip it this month because of a special occasion coming up.
That’s a slippery slope, though, and soon enough, you’ll forget about saving altogether. A better solution is to make the process automatic, so you forget it’s even happening.
The simplest way to do this is to set up an automatic transfer from your account each month into your savings account. Most banks have this option, and it can usually be done online.
If you set the money to be transferred on the same day as you get paid, you won’t have an opportunity to spend it before it gets saved.
There are other solutions to this too. One of these is Acorns, a service that lets you round up your purchases and put the difference into an investment account. For example, if you spent $3.40 on a coffee, it will take an additional $0.60 to round it up to $4 and put the extra cash into your investment account.
Make Your Money Work for You
When you’ve started to put your money aside, you need to make sure it works as hard as you do. Thanks to the power of inflation, money loses its value over time. Most governments, including in the US and UK, aim to maintain a 1-3% rate, which means you would need $103 next year to buy something that costs $100 today.
Therefore, you need your savings to at least match inflation just to maintain its current value. Otherwise, you’ll have to save even more each month just to make up the shortfall.
To do this, you need to find savings and investment products that offer higher rates of interest. This could mean agreeing to lock your cash away for a year or two, or it may mean buying stocks and shares.
You’ll need to get independent advice or do some research into the best types of investment, but you’ll likely want to diversify your money to reduce the risk and maximize the chance of a good return. Follow these quick and easy ways to save more money each month.
Featured Photo by Sandy Millar on Unsplash