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In honor of Financial Literacy Month, we’re highlighting the importance of saving and offering up a few ideas for how to save more of your hard-earned money— maybe even a few that you haven’t considered just yet! Recognized each year in April, Financial Literacy Month aims to bring awareness to the importance of financial literacy and smart money habits. However, it doesn’t have to be a certain month for you to begin to be intentional with your financial journey! Whenever you happen to be reading this is the best time to start so let’s dive in.
In this article, we’ll explore 5 tips for saving money that you just might want to incorporate into your current financial plan!
SAVING TIP #1: PAY YOURSELF FIRST
Life happens, weeks are busy, and time always seems to get away from us. This constant juggle with time can sometimes mean things accidentally fall through the cracks— it’s often inevitable that something won’t get done! Consider making saving a habit, not a chore by setting up your accounts to save automatically. Once it is set up, you no longer have to worry about it because it just happens! Whether you choose to reallocate your direct deposit or set up an auto-transfer to a savings account, automatically saving can:
Make saving more attainable.
Setting your account or direct deposit up to save automatically can make saving feel more attainable. It makes the process less manual and provides a reliable expectation for how much of your income you’ll really be taking home.
Help you reach your goals.
By saving automatically, you’ll likely make more consistent progress towards your savings goals than if you just sporadically save. This isn’t to say you can’t or shouldn’t sporadically put that extra money “aside for a rainy day” when you can. But, setting aside an intentional amount each pay period or month will provide reliable progress to meeting your savings goals.
SAVING TIP #2: SAVE FOR THE UNEXPECTED
Again, life happens… unexpected expenses pop up and if we aren’t prepared for them, they can really put a damper on our financial situation and progress towards achieving our goals. Saving for unexpected life events before they occur can:
Give you peace of mind.
Creating an emergency fund and intentionally saving for unexpected expenses can give you peace of mind in knowing that you’re covered whenever those life events do inevitably happen. While we can’t always predict what they are, how much they’ll cost, or when they’ll come, knowing that we’ve prepared and have funds set aside allows us to have financial peace of mind in the midst of an unexpected storm.
SAVING TIP #3: SAVE FOR BIG MILESTONES AND BIG DREAMS
We talk a lot about saving for the unexpected, but it's also important to remember to save for major life milestones and your "big dreams"! While you may be focusing on paying down debt, building up your emergency fund, or any other goal, saving for the major milestones you dream of achieving doesn’t have to be put on the backburner! A few ways you can chip away at your higher priority goals while not neglecting to save for your dreams are:
Make it a game.
Consider making saving a “game” by finding something in your life that you can pursue self-accountability in or reward yourself with! You can decide on a set amount to put aside in your savings account each time you achieve something. The possibilities are endless! Pro Tip: you can open several savings accounts specific to your savings goals to easily track your progress!
Keep the change.
Anytime you receive cash, whether for your birthday, a holiday, or random change here and there— consider storing it away and saving it! You can go “old school” and save it in a jar or envelope, then at the end of the month take your savings to your credit union to deposit into your savings account. You can even deposit it into a high-yield savings account to make your money work for you!
SAVING TIP #4: SPEND MONEY TO SAVE MONEY
While it may sound like the opposite of saving, “spending” to pay down debt is an essential part of saving! While you aren’t necessarily saving money on the front end, paying down debt and even allocating more than the minimum payment will save you money in interest in the long run. A few ideas to help you save while paying down debt are:
Pay more than the minimum.
By paying more than the minimum payment, you’ll pay more to the principal balance of the debt than to interest itself. Anything paid over the minimum reduces your balance and the interest charged on that balance, saving you money in the long run! If you do decide to pay more each month or make extra payments here and there, be sure that you indicate the payment goes to the principal. Otherwise, it may just be seen as an advanced payment.
Reduce interest.
To reduce the amount of money you are paying in interest, consider refinancing, consolidating, or transferring the balance of your debt. While these aren't right for everyone, they could be a good solution to help you reduce the amount of interest you pay currently. That way you can "save" on interest over the life of your debt.
SAVING TIP #5: NOW IS THE TIME TO START!
Regardless of age, there’s no better time to start saving than now! Begin having conversations with those around you to encourage them in their financial journey, too. Money conversations with family and friends don’t have to be taboo—talking to your kids, your friends, and your loved ones about your personal journey might just encourage them in theirs.
For help getting started in your savings journey, schedule an appointment with one of our certified financial counselors or stop by the location closest to you today!
