Monday, January 26, 2015

6 Ways to Save More Today!

As promised, here are some easy ways to start saving more money! These are the ways I think will be most helpful to my readers. If you have something that works for you, please leave it in the comments! I’ll be sure to add it. 

1) Digit: Saving. Automated.

My favorite new way of saving is Digit! Digit is an online savings platform that is, simply, amazing. Digit analyzes your spending habits and every week it comes up with a certain number of money it thinks you can afford to save. The amounts it suggests are almost always under $10 per week. I use the money I save with Digit as a type of “mini vacation fund”. The best part? It’s completely free! There are no hidden fees or expenses. Digit is a new company and they can’t accommodate all of the requests they have flooding in right away. This means new users normally have to wait in line. But, if you use my link you can skip the line and get started right away! So what are you waiting for? Give Digit a try now

2) Credit Card Cash Back

My second favorite way to bump up savings is to use your credit card cash back to save. For example, if my Capital One account has $30 in cash back, I’ll take that $30 and put it into Betterment. It’s a fantastic method I found out about a month ago: it means you’re saving 2% of all the money you spend. What can you lose?

3) Retirement is now!

Live like you’re already retired. This is a fantastic way to get yourself in the retirement mindset. To some people, retirement may be synonymous with frugal living and cutting back. This doesn’t have to be the case. If you get in the retirement mindset now, you can start saving more and not have a huge shift once you decide to retire. Right now I’m young and spending ~$20,000 a year to support myself comfortably. As long as I don’t let my spending grow out of control I won’t go into financial shock when I retire. 

4) Use a Savings Challenge

Another way to start saving more is to participate in a savings challenge. There are many challenges out there, but what I think is the key is having someone to be accountable with. You can find them in all sorts of places (like reddit). If you need someone I’ll be more than happy to help!

One popular savings challenge that has been gaining popularity recently is (what I call) the Savings Snowball. This starts off easy and gets harder an the year progresses. When you start: Save $1 the first week, $2 the second week, etc. By the end of the year (52 weeks) you will have saved an additional $1,378! Yeah, that sounded like a lot to me too, so I went and did the math and it’s correct! With that money you can make some pretty hefty progress towards any savings goals you have. You can do your own take on this if you’d like, so you aren’t saving so much towards the end of the year.

5) Squirrel Away Your Acorns

Acorns is a great tool for someone who’s struggling with saving on your own. Their app has a very slick interface and I love their concept: It rounds up all of your transactions to the next dollar and invests it. For example: if you were to buy a cup of coffee for $2.34, Acorns would “squirrel away” an additional $0.66 into your Acorns account. The money is invested in an account type similar to Betterment’s. My main issue with Acorns is that they charge a 1% fee when you use their investment service. This adds up fast. Over 40 years they would take roughly half of your earnings as an expense. If you can use any of the methods above i would recommend them first. With that being said, if you think Acorns is a good fit for you you should certainly check it out.

6) Get in the Savings State of Mind

Another (obvious) thing that has helped me save more is that the more you save, the earlier you can stop working. This simple fact helped me get into the saving frame of mind. If I save even 5% more for 20 years, I can stop working a year earlier! This has motivated me to start spending more. This realization has changed my mindset around finances completely: now I’m actually saving for a goal, instead of some arbitrary number.

Similarly, I wrapped my mind around the fact that money = freedom. I am not that enticed to buy the "next new thing” or buying something new if I already have an older, working, version. I always saved at least a little, just without purpose. Now, money represents being able to do what I want. Having $12,000 in savings means that, if I need to, I can leave my job and spend 6 months figuring out what to do next. I don’t think this will happen, but it is comforting to know I could pack up and move to Denver, CO for 5 months without needing to work. That's a lot of freedom.

Well there you go! Hopefully that helped you think about saving more and gave you a few new ideas that you would like to try out. As always, feel free to leave your feedback in the comments below. 

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