How can those who currently aren't saving begin to save money? How can those saving only a small amount increase their savings? Here are the top 3 saving habits you can adopt when you are on a tight budget.*
- Cut Spending Painlessly.
- Reduce High-Cost Debt.
- Take Free Money and Save It.
Need some help? Here are 10 saving tips to help you follow these saving strategies.*
Cut Spending Painlessly.
Tip 1: To find small savings that add up to big savings over time, keep a careful record of all (and we mean all) of your expenditures for a month. You may be surprised to learn how much you are spending on such things as a daily latte or restaurant meals.
Tip 2: Comparison shop on necessary purchases such as food, transportation, and insurance.
Tip 3: Restrain spending for birthdays and holidays, especially Christmas. A few well chosen gifts are likely to be more appreciated than a costly pile of gifts chosen thoughtlessly in a shopping mall foray.
Reduce High-Cost Debt
Tip 4: Payday loans typically charge interest rates of 500 percent, and the interest rate on credit card debts can run 25 percent. You can save hundreds, perhaps thousands, of dollars a year by paying off these high-cost debts. For help, contact any of our partner credit unions located in El Paso, Texas.
Tip 5: Build an emergency fund to avoid having to take loans to pay for unexpected purchases. That fund is usually best kept in a savings account, despite the low interest rates such accounts pay right now. But do try to keep a high enough balance in your account to avoid monthly fees.
Tip 6: Ask your bank or credit union to automatically transfer funds each month from your checking account to your savings account. Saving as little as $10 a month helps. By year's end you will have saved an additional $120.
Tip 7: Put all your loose change in a savings account. For many people, that could add up to well over $100 a year
Take Free Money and Save It.
Tip 8: Low- and moderate-income workers qualify, each year, for the Earned Income Tax Credit (EITC) that can put over $1,000, and possibly more than $2,000, in your pocket. Be sure to save at least half of this windfall.
Tip 9: If your employer matches retirement savings contributions, be sure to take advantage of that. Some employers match up to 100 percent of your contributions. While we encourage letting this money build up until retirement, it can be withdrawn, or borrowed on, to cope with serious emergencies.
*Savings strategies and tips are taken from America Saves “Saving on Tight Budget” . For more information on America Saves, El Paso Saves, and more saving strategies and tips please click on one of the two links below. There is a Spanish and English version of the website.