Whether it's for a house, car, or that warm weather vacation that lets you briefly escape the neverending Boston winter, we’re all saving up for something. Especially during the holiday season, however, saving is even harder than usual. The ability to make this big purchase suddenly feels even more unattainable. Here’s how to stay on track without depleting the rest of your savings, or worse, going into credit card debt.
1. Create a Budget and Stick to It
You’ve heard it before, but budgeting is a great tool. Review your income and spending, then analyze it to create a reasonable budget. This will be the most effective way to build up your savings. There are plenty of apps, tools, and personal finance specialists that can help you put a budget together, but this is also something you can do yourself in a matter of hours by taking a hard look at what’s going in and out of your bank account (and credit cards!). If there’s not much left after paying your bills each month, it’s time to be realistic with yourself. What can you give up? Can you find a cheaper grocery store? Forego that Starbucks habit? Turn down the heat a bit to reduce your utility bill? Get your calculator and spreadsheets ready!
2. Find an Additional Income Stream
If you’ve set your budget and realize that it’s going to take years to meet your goal, you need to weigh whether you can wait that long or whether you’d be willing to work harder to make it happen sooner. If it’s the latter, consider if it is time to ask for a promotion at work or ask if you can take on more responsibility. Or, pick up a second job. Spending your Saturdays working the register at a local boutique, or your evenings waiting tables, or your mornings at a gym or coffee shop where you can work a few hours before heading to your day job could make a huge difference to your bottom line. We’re also living at the height of the gig economy, which means there is lots of opportunity for part-time work, whether it’s driving for Lyft a few hours a week or selling handmade jewelry on Etsy.
3. Plan for the Unexpected
So say you’ve set your budget, you’re sticking to it and everything is looking great, but then your car breaks down and it needs $500 worth of repairs or the bridesmaid dress for your best friend’s wedding costs $300 after you’ve already agreed to be in the ceremony, or your oh-so-fragile iphone screen cracks and you have to pay that $100 deductible to get it replaced. Not fun, but also not uncommon, so don’t let these instances catch you off guard. It’s hard to do, but it’s definitely worth building a little extra padding into your savings account to cover these unpredictables. That way, it when something happens, it won’t prevent you from reaching your goal on time.
4. Check Your Subscriptions
Monthly or annual subscriptions can creep up on you. While each individual subscription seems too small to consider giving up, they can add up. $60 per month for a gym is only worth paying for if you actually go. Check how many Amazon orders you actually made in the past year to see if paying for Prime is really something you need. If you picked up a second job for the weekends, do you even have time to watch Netflix--or at the very least can you split an account with someone? Speaking of splitting accounts, Spotify has a family plan option that’s fairly cost effective.
5. Stay Motivated
Sticking to your budget is the hard part. So once you’ve designed your budget, don’t just leave it be--set reminders in your calendar to spend some time at the end of each month to see how you did. If you went over budget, figure out what pushed you over the edge and how you can do differently next month. Set your coffee maker to automatically brew a pot when you wake up so you won’t be tempted to purchase a latte on the way to work. Put a photo of the big purchase you’re saving for on your bathroom mirror so you are reminded of your goal daily. Just don’t be too hard on yourself. Saving is tough and you’re already taking the first steps, so give yourself a little credit!
Tags:
Savings,
Money Tips,
Budgeting
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