America Saves Week is a great time to encourage people to save money and build personal wealth. The observance is an annual celebration and a call to action for Americans to save successfully with financial confidence.
Financial confidence involves recognizing that saving has unique circumstances. For some, it is difficult or impossible to save your money; however, when you have financial confidence, you are still committed to taking control of your finances and working toward becoming financially stable.
Here are ten tips to kick off America Saves Week that can help you save money, become financially confident and ultimately build wealth:
1. Track your spending habits
To save, it’s important to start by knowing where your money goes. In fact, CNBC reports that 53% of Americans say, “learning how to budget and track expenses is the most valuable money lesson they’ve learned.”
You can track your spending in many ways – a notebook, a spreadsheet, or in your online banking app for example. Start by looking back at your past purchases and categorizing them. You may want to keep it simple with “essentials” and “nonessentials” or you may choose to break them out into different types of purchases. The most important thing is to become aware of your spending habits.
It’s easy to swipe the card and lose track of how the expenses are adding up. By reviewing your spending regularly, you can track exactly where your money is going and where you can trim back. You might be surprised at how much you spend on things like dining out and entertainment each month!
2. Establish a budget
Setting up a budget is one of the best ways to manage your spending habits. Once you’ve tracked your spending, you can see how you’re leveraging your money now. With that information, you can set a realistic budget that still helps you stay within your means and work toward your long-term goals.
Budgets don’t have to be complicated or overwhelming. Start by calculating how much money you bring in after taxes each month. Then, factor in essentials like your housing, utility bills, transportation, groceries, and any debt you’re paying off. After you’ve subtracted your essentials from your income, you can see your disposable income. Set aside some of that for saving and some for spending on nonessentials like gifts and entertainment.
Set up monthly limits by category. The key to sticking to your budget is to track your spending against it. That way, you can see what areas you’re spending more in or less than you would like.
Check out our blog posts on budgeting for beginners or leveling up your budgeting game for a step-by-step walkthrough and downloadable budgeting spreadsheets to guide you!
3. Set up savings goals
Set up goals and save money toward them. Setting specific goals – small or large – can make saving money more manageable and more rewarding! Knowing you’re saving for something meaningful, like a family vacation, holiday gifts or just for fun can simplify cutting back in other areas. You’ll get encouraged when you see your progress toward each goal, which can help you reach it.
After visualizing your savings goals, you can take it to the next level by intentionally carving out a percentage of your income to save rather than simply taking whatever is left over after your spending. In our budget building processes in other blogs mentioned above, you’ll set aside money for your savings at the beginning. How much should you plan to set aside? Financial experts often recommend a target of saving 20% of your after-tax income. However, retirement experts suggest saving 15% of your gross income toward retirement alone, which can be more challenging to work into the budget. Do your best to hit that 20% savings goal first, then work your way up toward saving more for retirement as your income grows and you have more disposable income.
4. Use an automated tool
Another great way to save money is to use an automated savings tool. You can work with your bank to set up a pre-authorized savings transfer from your paycheck so you don’t get to spend the money first. It’s incredible how quickly you’ll adjust to the change.
If you bank with Milli, you can set up Spending Round-Ups that round up your purchases with the Milli Visa® Debit Card to the nearest dollar and automatically move that amount to your Savings Account. It’s a way to help you get in the habit of savings and consistently work toward a savings goal.
5. Prepare for grocery shopping in advance
Another common way to blow your budget is to overspend on food. Maybe you’re opting for takeout or fast food in place of shopping for groceries, or going grocery shopping without a set shopping list. Making a list before grocery shopping is one of the most crucial savings tips we can offer. Here are some tips to make it more efficient:
- First, check your pantry and refrigerator to see what you already have so you don’t buy duplicates.
- Plan out your meals for the week. Buy ingredients that go together or that you can mix and match to create multiple different meals.
- Make sure you have pantry staples and the building blocks of meals on hand – these can be great to buy in bulk.
- Be realistic with the types of foods you like to eat and know how to cook.
- Look for coupons and loyalty program specials.
6. Look for ways to cut back on dining out
Dining out can be a budget buster. It’s no secret that eating out at lunch or dinner costs more than the food you prepare at home. But, dining out is a common social activity and cooking every meal for yourself can get tiring. So, aim to reduce the amount that you’re spending on eating out to whatever fits your budget. That might look like:
- Packing your lunch instead of buying it at work or school.
- Opting for less expensive restaurants.
- Eating a snack before you go out and selecting a less expensive option.
- Sticking to happy hour deals instead of the full menu.
- Having a potluck social gathering instead of going to a restaurant.
7. Taking advantage of all resources
Another helpful way to save money is to make sure that you’re maximizing all resources available to you. Take some time to evaluate local programs offered by your county or city, employer, or school.
Here are some examples:
- Get a library card and check out their digital offerings, programming, and services.
- If your employer offers a 401k retirement plan with a matching contribution, prioritize contributing what you need to to get the most money back.
- Comb through what your health insurance offers – free or discounted gym memberships, HSA or FSAs to cover healthcare spending.
- Look for student discounts or alumni services.
- Check out free parks and museums (or free admission days) for some no-cost recreation.
- Research tax credits and deductions you may be eligible for to reduce how much you owe in taxes.
- Choose a bank that has no fees or minimums and offers a competitive annual percentage yield to earn interest on your savings. (Hint hint: Milli!)
8. Create an unexpected event fund
No matter how great of a planner someone is, unexpected costs will still pop up from time to time. If you face an unexpected expense, your surprise cost fund can help cover the costs, so you aren’t forced to dip into credit and risk paying interest.
How much should you save? The exact sum will depend on your lifestyle. For example, if you have a higher end computer or car and it suddenly needs a new part or repair, that will cost more than if you own a more economical version of the product. To determine the right amount for you, evaluate the types of things in your life that would be a major disruption to your life if they suddenly broke or came up. Use the cost to address that scenario as a starting point goal.
9. Buy secondhand instead of new
Another great way to save money is by buying secondhand items. Secondhand shopping used to be challenging because it involved hoping you’d find what you needed at a yard sale or thrift store. But, these days, there are plenty of secondhand marketplaces where it’s easy to search for and find specific high quality items – both in person, or online. Try ShopGoodwill, Facebook Marketplace, eBay, Mercari, OfferUp, Poshmark, or Depop. Thrift stores or consignment stores can have incredible bargains too.
Do your research before purchasing, and you can find ways to save money by making your spending dollars go further. But remember – just because something costs you less than the retail price doesn’t mean you’re actually saving money if you’re going over your budget.
10. Unsubscribe from tempting marketing emails
Brands send a lot of marketing emails. One survey found over 70% of marketers send emails at least once a week (Databox). Chances are, your inbox is full of email from all types of brands sending you promotional emails.
You can avoid impulse purchases by unsubscribing from marketing emails. Remember, these marketing emails entice people to buy things they don’t need, all in the name of “saving money.” Take some time to go through your email and unsubscribe. By removing the distraction, you’ll also be less likely to feel like you’re missing out on stuff you wouldn’t have thought to purchase anyway.
Conclusion
During America Saves Week and beyond, these tips are essential to remember. Mastering one at a time can make a massive difference while gaining financial confidence. Imagine how great your finances will be after converting these tips into financial habits, and use that motivation to stick to them!
Need some help to make these adjustments? Milli’s Jars and real-time spending notifications can help set you up for success as you work toward your goals. Ready to get started? Download the Milli app now from the App Store or Google Play!
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